Press Releases

Small Business Contracting Reform Signed Into Law

Reforms Will Help Small Companies Compete In Federal Marketplace

f t # e
Washington, January 3, 2013 | DJ Jordan, Joel Hannahs (202-225-5821) | comments

House Small Business Committee Chairman Sam Graves (R-MO) today released the following statement on the President signing into law the National Defense Authorization Act of 2013 (NDAA), which includes contracting reform legislation reported by the House Small Business Committee

“Today marks the culmination of a comprehensive effort to reform contracting policy so that small businesses can better compete in the federal procurement marketplace. In the beginning of the 112th Congress, our Committee made it a priority to listen to the concerns of small contractors who want to seek business opportunities with the federal government. The process uncovered various barriers that made it harder for small businesses to succeed, so we introduced and reported out legislation to address the problems. The small business provisions in the NDAA will help make sure existing small business goals are actually met, empower small business advocates, and crack down on fraud. I’m very proud of the Committee’s bipartisan work. These reforms will help small businesses compete in the federal marketplace, bring efficiency and cost-savings to the taxpayer, and create jobs while doing it.” 

In early 2012, the Small Business Committee introduced a series of contracting reform bills. The legislation was the result of the findings of 10 contracting hearings during 2011. On May 10, 2012, the House Armed Services Committee voted to include the Committee's contracting reform legislation into the National Defense Authorization Act of 2013, which the House passed on Friday, May 18, 2012. On December 20, 2012, the House passed the National Defense Authorization Act Conference Report. Today, the President signed the legislation into law.

Notable Contracting Provisions In The NDAA:
• Enforces existing small business contracting goals by requiring that meeting the goals be a part of senior agency employee reviews and bonus discussions. The federal government has missed the 23% small business goal for six consecutive years.
• Changes limitations on subcontracting from cost to price, which will make it easier for small businesses to comply with procurement rules, while also allowing them to team together to pursue larger contracts.
• Prevents contracting fraud by placing penalties on violating limitations on subcontracting, and makes it easier to suspend and debar companies intentionally defrauding the government.
• Helps woman-owned small contractors by removing the set-aside caps on the women’s contracting program.
• Requires the SBA to develop size standards that accurately define what is a small business for each of the over 1100 industries where small firms operate, instead of allowing SBA to continue taking short cuts for its own administrative convenience.  
• Gives small business a “safe harbor” if they acted on a written advisory opinion from either a Small Business Development Center or Procurement Technical Assistance Center and violated a rule by mistake. 
• Brings transparency to insourcing decisions by requiring OMB and agencies to publish procedures, methodologies, and guidance documents associated with the decisions.
• Fights contract bundling, the practice of grouping several contracts together for bidding, thereby making it difficult for small businesses to compete. The law requires additional oversight and a report that will analyze whether contract bundlings are justified.


f t # e