House Republicans Would Raise Small-Business Contract Goals

The federal goal for steering contracts to small businesses would rise from 23 percent to 25 percent of an agency’s awards under legislation introduced on Wednesday by the chairman of the House Small Business Committee.

A related bill to require greater transparency in bundled contracts to help small businesses better compete with large contractors also was placed in the hopper. Both came days after the Government Accountability Office critiqued the Obama administration’s follow-up assessment on measuring progress toward set-aside contracts for qualified small businesses.

“These two pieces of legislation will go a long way towards increasing opportunities for small companies who want to grow and create jobs by doing business with the federal government,” said Chairman Sam Graves, R-Mo. “By increasing the federal-wide goal for contracts to small businesses, and requiring greater accuracy, transparency and accountability in contract bundling and consolidation, we make it easier for small businesses to enter this marketplace and compete for contracts. The federal government spends nearly half a trillion dollars on contracted goods and services, therefore, we must ensure that the money is being spent efficiently.”

The 2014 Greater Opportunities for Small Business Act would raise the contracting goal by two percentage points and steer an additional $10 billion in business to small business, Graves said, though he acknowledged that government has missed the existing goal of 23 percent for the past seven years. His plan would draw on “past success,” he said, while boosting the percentage goal of subcontracted dollars available to small businesses from 35.9 percent to 40 percent. Only prime contract awards, under the bill, would count toward the prime contract goal.

The 2014 Contracting Data and Bundling Accountability Act would task the Small Business Administration with creating a data quality improvement plan to promote accuracy in describing consolidated contracts.

Rep. Richard Hanna, R-N.Y., chairman of the panel’s Contracting and Workforce Subcommittee, said, “These commonsense bills give more small firms an opportunity to provide goods and services to the federal government, increasing the likelihood that they will create new jobs, hire more workers and provide savings to taxpayers.”

GAO auditors on Monday faulted the documentation of strategic sourcing contracts awarded to small businesses -- particularly those owned by veterans, service-disabled and socially and economically disadvantaged individuals – as stipulated in guidance from the Office of Management and Budget and the General Services Administration.

Strategic sourcing, pioneered in the private sector, is a way to aggregate contracts for purchases such as printing and office supplies. The GAO report found that overall small businesses are being included in most strategic sourcing efforts. However, auditors wrote, “Although GSA has collected baseline data on proposed government-wide initiatives, it has not developed a performance measure to determine changes in small business participation going forward.”

GAO reviewed progress at the Defense Department, specifically the Army and the Defense Logistics Agency, and the departments of Homeland Security, Housing and Urban Development and Interior, as well as NASA. It faulted OMB’s efforts at monitoring agency compliance with guidance on setting baseline data.  

“Federal internal control standards state that effective monitoring should assess the quality of performance over time,” the watchdog wrote. “Without effective monitoring, it will be difficult for OMB to help ensure that agencies are tracking the impact of strategic sourcing on small businesses.”