The Small Business Subcommittee on Contracting and Workforce, under the chairmanship of Rep. Richard Hanna (R-NY), today held a hearing to examine the slow implementation of the numerous small business procurement reforms included in the National Defense Authorization Act (NDAA) for Fiscal Year 2013. The law was signed by the President on January 3, 2013, yet the regulatory promulgation process has not begun yet.
The reforms make various changes to procurement law that help small businesses compete for federal contracts, including making 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, just to name a few. Given that most procurement regulations affecting small businesses must undergo a two-step regulatory process by the Small Business Administration (SBA) and the Federal Acquisition Council, these delays make it unlikely that the reforms will be fully implemented before the next President takes office in 2017.
"The slow implementation of these critical small business contracting reforms is extremely disappointing, not only to legislators but also to the small businesses that could benefit from better public policy,” Chairman Hanna said. “Taxpayers want the Administration to actually implement laws which will help grow the economy. Unfortunately, the delay we are witnessing is the real-world consequence of an overly bureaucratic federal government. The priorities of our federal agencies are misplaced and need to change so that the sound policies approved by Congress and signed into law become a reality for American small businesses desperate to grow and create jobs.”
Materials from the hearing are available on the Committee’s website HERE.
Charlotte Baker, President of Digital Hands in Tampa, FL said, “The delayed implementation of this “similarly situated entity” [Section 1651 of P.L. 112-239- subcontracting transparency] provision has negatively impacted the [women-owned small business] community. Digital Hands’ recent experience is a clear example of why this is so important.
“My recommendation is simple: urge the SBA to implement this provision as quickly as possible to bring these necessary changes that impact businesses who are the economic engine in the United States. Thanks to this Committee’s leadership, Congress passed the change; now, the SBA needs to implement it. The longer the delay, the more that all small businesses will continue to miss out on opportunities.”
Larry Allen, President of Allen Federal Business Partners in McLean, VA said, “I am here today to discuss Sections 1681, 1682, and 1683 of the FY’13 NDAA. Collectively, these laws will limit the liability of companies receiving advice from federally-supported entities on government contracting matters, provide greater clarity about small business suspension and debarment procedures, and provide this body with additional reporting on that process to ensure the fair treatment of small business government contractors.
“Our firm recommends that Congress continue to provide oversight on the SBA’s lack of progress in implementing these three key elements of the 2013 NDAA and take steps to hold senior agency officials accountable for this inaction. Small firms are not getting the benefit of the protections originally envisioned. Businesses that are not truly small are still competing with legitimate businesses for small business work.”
Angela Styles, Partner at Crowell & Moring, LLP. in Washington, DC, said, “SBA’s failure to act has created significant ambiguity for federal contractors—both small and large. While this uncertainty keeps the lawyers busy, it costs government contractors—and ultimately results in higher prices for the federal government and taxpayers.”