SBA proposals could make small-biz credit easier to get

The Small Business Administration is considering changes to its rules that would allow an agency spending its money through a task or delivery order to chalk up the awards to its own subcontracting plans, according to a Oct. 5 Federal Register notice.

Agencies could start to get credit toward their annual small-business subcontracting goals for their orders placed against multiple-agency contracts, a perk for agencies as procurement policy officials push strategic sourcing.

Each agency has to set its own annual goal to make sure that various types of small businesses have an opportunity to participate in its contracts.

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Currently though, when purchases come through an inter-agency contract, the agency that holds the contract gets the credit. That applies to the General Services Administration Schedules contracts too. 

For example, consider an agency that places an order against a governmentwide acquisition contract. Say a large company gets the award and subcontracts some of the work to a small business subcontractor. The agency that hosts the GWAC gets the credit for hiring a small business, not the agency placing the order.

Prime contracts work differently. If an agency awards an order placed on a GWAC directly to a small business, the purchasing agency gets the points.

Agency officials have told SBA they would like to get the small-business subcontracting credit when they're spending the money. SBA is also considering giving discretion to the contracting officer from the agency that’s placing the order to establish the subcontracting goals related to the individual orders.

Officials also want real-time insight into subcontracting on interagency contracts. Contractor may have to report their subcontracts with small businesses to the host agency’s contracting officer for each order.

Currently, contractors are reporting to the agency twice a year at the most.

“Reporting on an order-by-order basis will allow the funding agency to receive credit towards its small-business subcontracting goals,” SBA writes in its proposal.

SBA is taking input on the proposal through Dec. 5.

In light of SBA's changes, Dan Gordon, administrator of the Office of Federal Procurement Policy, has pushed agencies to think beyond their own purchasing and, instead, buy with the government in mind.

Strategic sourcing gives the government leverage over the contractor in setting prices. A greater quantity of potential orders encourages contractors to lower prices.

Office of Management and Budget officials believe agencies want to use more interagency contracts in order to squeeze the most out of their funds and lessen their employees’ workload.

“Particularly in this tight budgetary environment, agencies have told us they are eager for tools that can help them stretch a dollar further and do more with less,” an OMB spokeswoman said Oct. 5.

SBA’s proposed change may make subcontracting goals slightly easier to meet, especially if agencies are turning more toward the interagency contracts, said Ken Dodds, senior attorney at SBA.

He said agencies would find it more difficult to meet subcontracting goals if they didn't credit.