White House mulls small-business help

Two White House working groups are slated to make recommendations this fall for helping small businesses compete more effectively for federal contracts.

Among their tasks, the interagency groups will try to identify large, governmentwide contracts that can be "unbundled" or divided into smaller contracts that small businesses would have a better chance of winning, according to administration officials.

This effort comes at a time when small business leaders and some on Capitol Hill are pushing the administration to provide more opportunities for small businesses to win government work.

Draft legislation sponsored by Sen. John Kerry, D-Mass., chairman of the Senate Committee on Small Business and Entrepreneurship, proposes to increase the small business goal from 23 percent of all federal prime contracts to 30 percent.

[IMGCAP(1)]The Small and Disadvantaged Business Ombudsman Act would also create an ombudsman position in the Small Business Administration to track trends in the treatment of small businesses and the training of procurement staff in small-business provisions, and to serve as a contact for small businesses to file confidential complaints.

"We cannot have the federal government spending billions and not reach out and share the pie," Kerry said at a June 19 roundtable meeting of the Senate small business committee.

In fiscal 2001, agencies awarded 22.8 percent of prime contracts to small businesses, just less than the 23 percent target. But agencies were far off their goals for awarding work to businesses owned by women, disabled veterans and businesses located in urban renewal zones.

Many small business leaders said some procurement reforms, while streamlining the government's buying process, have made it more difficult for them to compete.

In particular, they point to the practice of bundling many small contracts into large contracting vehicles, such as multiple award task and delivery order contracts and the General Services Administration Multiple Award Schedules program, where competitions for orders are limited to pre-qualified contract holders.

Some small business owners said they don't have the resources to pursue work under large procurement vehicles, and that small businesses on governmentwide schedules rarely get orders off those schedules.

During two meetings last month on this issue, administration officials said they are working to find solutions in line with the president's Small Business Agenda, which was published in March. The agenda said contracting should be done through full and open competition, avoiding unnecessary contract bundling, which it says puts small businesses at a disadvantage if they are not capable of supplying all the contracts.

Angela Styles, administrator of the Office of Federal Procurement Policy in the Office of Management and Budget, said the two interagency working groups, overseen by the OMB, are expected to offer recommendations this fall for making the procurement process more open to small businesses.

[IMGCAP(2)]The problem facing small businesses is that a contract schedule could include 1,000 companies that have been qualified for work, but agency purchasers only have to go to three companies for bids, Styles said at the June 19 roundtable.

"Small businesses never know about [opportunities]," she said.

In an interview, Linda Williams, associate administrator for government contracting SBA, said contract bundling and using many large multiple-award contracts may have affected the ability of small businesses to compete. The SBA is working on a task group that is examining where contracts might be unbundled, she said.

At a June 14 meeting called by OFPP to address the impact of contract bundling on small businesses, representatives of larger business entities argued that the problem is not large procurement vehicles, but the enforcement of small business contracting goals under those vehicles and training of procurement personnel.

The solution, said representatives from the Information Technology Association of America and Professional Services Council, is to provide better training to procurement officials so that the government's small-business goals are enforced.

But small-business owner Joan Kraft testified June 14 about the difficulty of competing against large businesses. Kraft recently retired after 20 years with the Navy and started Beacon Partnerships Inc. in Alexandria, Va., providing consulting on the Federal Activities Inventory Reform Act to federal agencies.

Although Kraft won subcontracting work on a number of large contracts, some prime contractors are not sending the expected work her way. She believes the prime contractors used her expertise to educate themselves and win the work, and then left her out in the cold.

"They get the contract on the fact that they have a small business, and you have the knowledge and experience that they want, and no one checks to see if you even got an hour's worth of work," Kraft said.

Gwen Johnson, small-business advocate for the Navy-Marine Corps Intranet project for prime contractor Electronic Data Systems Corp. of Plano, Texas, said in an interview contract bundling does impact businesses large and small, because there are fewer prime contractors. But because the large contracts mandate small-business participation, opportunities for small businesses could actually increase, she said.

The NMCI contract mandates that 40 percent of the value of the contract must go to small businesses. EDS is measured on the goal every six months and rewarded for meeting it or penalized for missing it. For the past three six-month periods, EDS has exceeded the goal, she said.

"It isn't just a number; these companies actually perform services that are critical to the program," she said.

Staff Writer Gail Repsher Emery can be reached at gemery@postnewsweektech.com.