Press Releases

Small Business Committee Examines the Impact of Category Management on the Small Business Industrial Base

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Washington, June 13, 2018 | comments

WASHINGTON—Today, Members of the House Small Business Committee examined the Executive Branch’s approach to utilizing Category Management (CM) principles and the impact it may have on small businesses and the industrial base. CM are a set of procurement approaches attempting to eliminate redundancies, increase efficiency, and deliver value all while saving the taxpayers money.

“While Category Management can be useful in tracking the federal government’s purchasing habits in order to identify efficiencies and keep contracting costs down, the proposed plan may be problematic,” said Chairman Steve Chabot (R-OH). “There is great concern among the small business community that recent efforts steering spending towards “best-in-class” contracting vehicles will restrict competition and significantly reduce opportunities for the majority of small businesses.” 

What the Experts Said

“No one would disagree with the goals of efficient government buying and saving the taxpayer money. However, we believe Category Management comes at a cost,” said Ms. Shirley Bailey, CEO and Managing Member of MSC Management Services, LLC in Oakland, MD, testifying on behalf of the HUBZone Contractors National Council. “Fewer small business awards not only limits the supply of vendors to the government, the ripple effect limits the ability of small businesses to grow through federal contracting.”

“PSC [Professional Services Council] cautioned then [five years ago], and we do so again today, that more needs to be done to prevent unintended consequences on the small and other-than-small companies that are—or that are capable of—meeting the government’s needs,” said Mr. Alan Chvotkin, Executive Vice President and Counsel at the Professional Services Council in Arlington, VA. “Since then, and particularly as CM has transitioned from what began as a management technique into a procurement policy, there have been negative consequences for the supplier base and for the marketplace.”

“In its current form, the Best-in-Class acquisition process picks winners and losers without assuring full and fair competition, thereby locking out thousands of small businesses from the very contract opportunities that were guaranteed to us in 1978 through Public Law 95-507, ‘Amendments to the Small Business Investment Act,’” said Ms. Beth Laurie Strum, Vice President of Business Development at Volanno in Washington, DC, testifying on behalf of the U.S. Women’s Chamber of Commerce. “The abrupt transformation of the federal acquisition process to Best-in-Class vehicles will have a crippling effect on small business competitive opportunities.”

“Many of my small business colleagues have spoken with me directly in terms of the Category Management approach as well as previous strategic sourcing initiatives.  Across the board, they are overwhelmingly opposed.  Anything that winnows down the ability to compete on a fair and level playing field is challenging across the industrial base,” said Ms. ML Mackey, CEO of Beacon Interactive Systems in Waltham, MA, testifying on behalf of the National Defense Industrial Association. “Getting best in breed products and services as rapidly as possible to the men and women who protect us is of paramount importance. Unfortunately, the contract approach prescribed by Category Management will have an opposite and deleterious effect on this goal.”

Click HERE to read full testimonies and HERE to watch full hearing video.
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