House Small Business Committee Chairman Sam Graves (R-MO) today introduced legislation that will help create jobs by providing more contracting opportunities for small businesses and reforming federal contracting policy that often marginalizes small contractors.
The Greater Opportunities for Small Business Act of 2014 will increase the federal government goal for small business contracting percentage from 23 percent to 25 percent, and the Contracting Data and Bundling Accountability Act of 2014 will bring more transparency to data reported on bundled and consolidated contracts. When many small contracts are combined into one large contract, many small businesses are left at a disadvantage when bidding. Both bills will work to create a more even playing field for small contractors.
“These two pieces of legislation will go a long way towards increasing opportunities for small companies who want to grow and create jobs by doing business with the federal government,” said Chairman Graves. “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. The federal government spends nearly half a trillion dollars 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.”
During Chairman Graves’ leadership, the Committee has successfully spearheaded small business contracting legislation that has become law. The National Defense Authorization Acts of 2013 and 2014 incorporated several Committee-sponsored contracting provisions, including making the small business goals part of senior agency employee reviews and bonus discussions, preventing contracting fraud by penalizing companies that front for large businesses, and changing limitations on subcontracting to make it easier for small companies to team on larger contracts.
Details of the legislation:
Greater Opportunities for Small Business Act of 2014:
• The federal government spends about $460 billion in contracting each year, with a goal of awarding 23% of prime contract dollars to small businesses.
• This legislation raises the small business contracting goal from 23% to 25%. Raising the goal by 2% means a substantial amount of new business for small businesses – about $10 billion worth.
• The federal government has missed this goal for seven consecutive years, but past success proves it is achievable.
• The legislation also ensures opportunities for small businesses as subcontractors, with a goal of awarding 40% of all subcontracted dollars to small businesses – an increase from the current goal of 35.9%. The new goal will go into effect once the subcontracting reforms in the FY 14 NDAA are fully implemented.
• The bill also promotes accurate reporting, by requiring that only prime contract awards can count towards the prime contract goal.
Contracting Data & Bundling Accountability Act of 2014:
• Recent GAO reports and Committee hearings have brought to light that the data on contract bundling and consolidation reported each year is seriously flawed. Some agencies claim not to have bundled a single contract in the 17 years since the original contract bundling legislation passed, but even a brief examination of contract practices suggests otherwise.
• This legislation requires the Small Business Administration (SBA) 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 GAO to assess the agencies’ success, and offer suggestions for further improvement.
• Properly labeling a contract as bundled or consolidated is incredibly important to small business competition, since the act of labeling the contract is what triggers a series of reviews and mitigation steps intended to promote opportunities for small businesses.