Press Releases

SBA’s ‘Fuzzy Math’ and Other Challenges for Small Contractors

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Washington, November 18, 2015 | comments

Today, the Small Business Committee’s Subcommittee on Contracting and Workforce examined continuing challenges for small contractors with a diverse panel of small business stakeholders with first-hand experience navigating federal contracting laws. The inconsistent and often inaccurate way the Small Business Administration (SBA) measures the allocation of federal contracts was a key topic of discussion.

“Given the hundreds of billions in federal contract dollars at stake each year, ensuring that small businesses have the opportunity to compete for federal prime and subcontracts is key,” said Subcommittee Chairman Richard Hanna (R-NY). “The goals are supposed to help us accomplish this, but currently they are being used to paint a rosy picture rather than to capture reality. We also need to make sure that subcontracting opportunities are real, and that subcontractors with the desire and capability are able to transition to being prime contractors."   

Hanna noted that while SBA reports that the federal government exceeded the statutory goal of awarding 23 percent of prime contracts to small businesses each year for the last two years, the reality is that the federal government excluded nearly 20 percent of its contract dollars before making that determination.

Key quotes from witnesses at today’s hearing below:

“Subcontracting plans should no longer just be words on paper to address a proposal requirement. It should be an executable management plan that is contractually binding under and which the prime contractor is measured and held accountable,” said Michael D. Janeway, President and CEO of APG Technologies, LLC of Sterling, VA. “The subcontracting plans requirements should be revised to increase small business subcontracting participation and enhance the electronic subcontracting reporting system to improve federal agency monitoring of prime contractor achievements against their subcontracting plans.”

“Two pieces of information should be reported and easily accessible: subcontracting opportunities available for a given contract and the extent to which those opportunities are actually being performed by a small business.” said Anne Crossman, the Head Revolutionary for Completed Systems of Oakton, VA.  

Congress needs to ensure that that the executive branch implements “the lower tier small business counting reform in a timely fashion and in a practical and reasonable manner that will generate reliable data without being overly burdensome to contractors . . . [and reviews] the market research efforts, if any, that federal agencies use to set small business subcontractor goals,” said Edward T. DeLisle, Partner and Co-Chair of the Federal Contracting Group of Cohen Seglias Pallas Greenhall & Furman PC in Philadelphia, PA. 

You can watch the subcommittee hearing HERE
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