Building a small business is a challenging endeavor. It’s never without risk, competition and tough decisions. Since small businesses are the nation’s best job creators, the federal government should recognize a clear interest in doing its part to create a business climate in which small and mid-sized businesses can succeed. That’s why we support lower taxes, smarter regulation and economic certainty, so that job creators are free to focus on their business plans, rather than wading through red tape and playing a guessing game on how the rules might change.

The government should not be the architect of volatility. Unfortunately, the health care law is a major source of uncertainty to small businesses. Even before the extent of the train wreck became known with the opening of the federal exchanges on October 1, the many requirements of the law have been a burden to small businesses as they have attempted to comply. The rules are unnecessarily complicated and confusing in many cases – how to calculate employee hours, who is a full-time employee, which businesses are affiliated, how to qualify for a tax credit, and the list goes on. And the promises that were made publicly have turned out to be far from the mark – small businesses are losing their plans and the promised mechanism to shop for affordable coverage is a ruse. The management failures of the Small Business Health Options Program (SHOP) are part of a disturbing trend of missteps and delays, as our hearing this week further uncovered, and these failures are the epitome of uncertainty. Small businesses deserve much better.

Sincerely,

Sam Graves
Chairman

Latest Committee Action

Also on Wednesday, the Subcommittee on Contracting and Workforce, under the chairmanship of Rep. Richard Hanna (R-NY), held a joint hearing with the Veterans' Affairs Committee's Subcommittee on Oversight and Investigations to examine the use of reverse auction contracts in the federal government, focusing on its budgetary impact, its effect on competition, and whether additional guidance or legislation is necessary to address its inefficiencies. Under a reverse auction, companies continue to under-bid each other, usually through a digital portal, until one is declared the winner. The intention is to drive down prices to the lowest possible amount. However, the United States Army Corps of Engineers (USACE) found last year, that the reverse auction methodology did not work for construction contracts due to their high degree of variability, and that the methodology did not deliver the promised savings. Rep. Hanna has sponsored the Commonsense Contracting Act of 2013 (HR 2751). This bill would prohibit federal agencies from bidding construction contracts suitable for award to a small business through reverse auctions.

News from Washington

This week, the House and Senate Budget Committees announced a bipartisan budget agreement that does not raise taxes, reduces the deficit and restores some defense spending that was cut due to the sequester. On Thursday, the House passed this legislation by a vote of 332-94.

The House also passed the National Defense Authorization Act (NDAA) for Fiscal Year 2014, which authorizes all defense spending and construction for the year ahead, and includes two amendments by Chairman Graves and the Committee on behalf of small businesses. One amendment helps small businesses compete for Defense Department contracts and provides clearer guidelines on subcontracting rules, so small businesses know to follow the Small Business Act’s requirements. A second amendment, introduced as the Make Every Small Business Count Act, provides incentives to federal prime contractors to ensure they consider small businesses for subcontracts.

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