Senators again try for small business parity

Proposal would strip HUBzone businesses of their special standing among small businesses.

In February, a Federal Claims Court judge ruled that the “shall” in the law regarding the HUBZone program is a mandate to contracting officers. Other small-business programs don’t have such a stern legal word regarding their use. Along with the court, the Government Accountability Office has ruled twice that contracting officers had to first consider companies in the HUBZone program, because of the “shall” in the statute.

Senators are again attempting to remove some mandates related to the federal small-business programs.

On March 26, Sen. Mary Landrieu (D-La.), chairwoman of the Small Business and Entrepreneurship Committee, and Sen. Richard Durbin (D-Ill.) introduced the Small Business Parity Programs Act (S. 3190).

The measure would place three small business government contracting programs on equal footing when competing for small-business contracts. It would give federal contracting officers the authority to choose the program that best suits an agency’s need.

Currently, businesses in the Historically Underutilized Business Zone (HUBZone) program get first rights to set-aside procurements. Meanwhile, small firms in women-owned, 8(a), and service-disabled veteran-owned business programs get a chance at the procurement if a contracting officer can't find two HUBZone companies to do the work.


Related stories:

Federal court rebuffs Obama on small-business preferences

GAO ruling gives HUBzone small businesses a boost

Congress could end HUBZone priority in small-biz contracting


“Because I, along with Sen. Durbin of Illinois, strongly disagree with this decision, we filed this legislation to create parity amongst the programs,” Landrieu said in a statement. “This simple, yet effective, bill is a good step toward opening those doors, fixing current law and having an immediate and positive impact on small businesses seeking equal access to federal contracts.” The bill would strike the "shall" in statute related to the HUBZone program and insert "may."

Landrieu and her committee's ranking member, Sen. Olympia Snowe (R-Maine), inserted the parity language into the Senate's version of the fiscal 2010 National Defense Authorization Act. But it was removed from the legislation during a conference session when senators and House members were working out the differences in their versions of the bill.

Along with some members of Congress, officials at the Small Business Administration and the Obama administration disagreed with the GAO’s rulings. Peter Orszag, director of the Office of Management and Budget, in 2009 told agencies to ignore GAO’s decisions and consider all programs as the same.

“It is well past time to provide more equality and greater opportunities for the thousands of small-business owners who wish to do business with the federal government,” Landrieu said. The bill was referred to her committee for consideration.

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