New small-biz rule may hinder agencies, SBA's Preston says

RICHMOND, Va. ? A new rule requiring small businesses to recertify their size regularly may hinder agencies' current goal of awarding 23 percent of contracting dollars to small businesses, a Small Business Administration official said June 4.

At the end of this month, small businesses will have to check their size status on long-term contracts under three scenarios: when a contract option is exercised, a small business is purchased by or merged with another company, or the first five years of a contract are completed.

The changes will make it harder for agencies to meet the 23 percent goal, SBA Administrator Steven Preston said in a speech at the Management of Change conference. He is, therefore, against increasing the small-business goal to 30 percent, he added.

The House passed a bill in May that would raise the small-business contracting goal by seven percentage points to 30 percent. The Senate has not passed the legislation.

With the recertification rule and other efforts, Preston said, "there are a number of small-business contracts that are going to lose their small-business designation, and [agencies] are going to have to work very hard to stay abreast of the 23 percent goal."

But SBA is not going to let up on agencies. This summer it will issue a report card for each agency, rating them green, yellow or red depending on how well they work with small businesses.

"This isn't what's going to make you happy," Preston said responding to a question about agencies being "goaled to death." "But we're pushing harder to make sure we meet those goals."

As meeting the goal gets tougher, Preston said, agencies need automated tools that link the types of small businesses to the agencies' contracts. SBA is working on technology that will give agencies lists of small businesses able to handle a specific contract's requirements, he said. The agency has launched such a tool for Historically Underutilized Business Zone businesses.

"It really falls under the moniker 'easier to do business with,'" he said.

Matthew Weigelt writes for Federal Computer Week, an 1105 Government Information Group publication.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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