Buy Lines: Recommendations for helping small businesses

Bob Welch, partner, Acquisition Solutions

Concerns continue to mount over the impact of procurement reforms on small business. On the heels of an Oct. 2 Small Business Administration report that recorded the highest bundling rates in a decade, the Office of Federal Procurement Policy released the administration's unbundling strategy. The plan focuses more on preventing bundling -- through reviews and a higher level of accountability -- than on unbundling existing contracts. The plan seeks to hold agencies accountable for eliminating unnecessary contract bundling and mitigating the effects of necessary bundling.

The SBA report said the most frequently used contract vehicles for bundling are General Service Administration schedules, multiple award contracts and indefinite delivery, indefinite quantity contracts. These are, in effect, the products of procurement reform.

Interestingly, the General Accounting Office reported last year that procurement reforms do not appear to have eroded small business market share. Even more interesting, the conflicting SBA and GAO reports both reached their conclusions based on data reported to the Federal Procurement Data System, which is notoriously inaccurate.

The fact is that no one knows with certainty whether procurement reforms and contract bundling have hurt small businesses. While there are plenty of convincing anecdotal stories of the harm that has been caused, the truth is that accurate data doesn't exist.

Further, if we assume the data is accurate and small business market share has declined, is contract bundling solely to blame?

Regardless of the answer, the objective for the government should be to find ways to use the power of procurement reforms to help small businesses, whether through prime contracts or subcontracts, in the pursuit of accomplishing agency missions. The administration's unbundling strategy calls for SBA to collect and disseminate examples of successful strategies for maximizing small business opportunities. Some possibilities:

* Place orders under a small business GWAC. The Commerce Department's COMMITS GWAC offers multiple award contracts with only highly qualified small businesses.

* Solicit quotes for Federal Supply Service orders only from small businesses. While small business set asides are not authorized under Federal Supply Schedule, it is permissible to limit consideration for an order to small businesses.

* Consider a creative long-term use of GSA schedules rather than a full-and-open competitive small business set aside on a short-term, contract-by-contract basis. An agency might issue a sources sought announcement via GSA's new e-Buy program, soliciting qualification statements from multiple small businesses.

After reviewing qualification statements and selecting highly qualified small businesses, the agency might establish FSS blanket purchase agreements with multiple small businesses, against which it will compete future orders for the applicable services.

While the government should do its part to steer work to small businesses, certainly not all government requirements are suitable for small businesses. So some amount of contract consolidation may make good business sense. A healthy balance is the goal.

OFPP's unbundling strategy strives to achieve a reasonable balance. It calls on the various sectors of the acquisition community -- government, large businesses and small businesses -- to do their part.

It is clearly time for all of the acquisition community to get serious about small business policy. The administration's strategy should help serve as a wake-up call to large businesses to get serious about drafting subcontracting plans and living by them. There's more that big business can do in terms of strategic alliances and mentor-protege arrangements.

As for small businesses, the challenge is this: Don't wait for business to come to you. Learn about the ways the government can reach you, and educate your prospective clients as you practice relationship marketing.

Bob Welch is a partner with Acquisition Solutions Inc. His e-mail address is bob.welch@acqsolinc.com.

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