Some companies can keep small-biz contracts under House proposal

Small businesses that have outgrown that status because of a government contract may have some cushioning when the contract is competed again

Small businesses that have outgrown that status because of a government contract could have some cushioning when the contract is competed again under new legislation in the House.

Agencies could still consider the incumbent contractor to be a small business if the company was a small business at the time of a initial contract award, but is no longer small at the time the recompete rolls around and is in danger of reverting to a small business again if it is not awarded the contract, according to the Small Business Fair Competition Act (H.R. 3558).

However, the recompeted contract would have to be for essentially the same goods or services provided under the current contract.

Agencies can get credit toward their various small-business contracting goals for awarding contracts to companies defined as small. Overall, the government as whole often misses its goals.

Rep. Parker Griffith (D-Ala.) introduced the bill Sept. 14. His district in northern Alabama includes the U.S. Army Aviation and Missile Command and the NASA Marshall Space Flight Center. He’s a small-business owner and a member of the House Small Business Committee.

Guy Timberlake, CEO and chief visionary officer of the American Small Business Coalition, said the legislation is troublesome because small businesses would have to compete with incumbents who are no longer small and would have more resources to leverage than the true small businesses.

The bill could create another obstacle for small businesses, he said.

The bill was sent to the House Small Business and the Oversight and Government Reform committees.

About the Author

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

Reader Comments

Fri, Oct 16, 2009 Robert Alabama

Matthew; again I say that the focus on the American dream is being tarnished with this legislation. Parker Griffin wants to reward large business for keeping work from small business. That’s what he is saying in a nut shell. If your company graduates from the small business category you are in fact at that point a large business; and this is so because you would have had to reached a certain revenue base for three consecutive years. In some cases where recertification is not required in the contract, a small business turned large business can perform on a contract to the end of the term whether it is five or ten years. When will it end? At any rate, Parker Griffin needs to find another way to reward large business other than at the expense of small business.

Fri, Sep 25, 2009

The article states: "Rep. Parker Griffith (D-Ala.) introduced the bill Sept. 14....He’s a small-business owner and a member of the House Small Business Committee." Why am I not surprised that he is not introducing legislation dealing with conflict of interest? This is what makes America great--arriving in a position of power, then advocating your own parochial interests?

Thu, Sep 24, 2009 Guy Timberlake Columbia, MD

To Sanjah: In response to your question: "Why should a company that could submit a proposal as a small business be treated worse than other companies of the same size but for being the incumbent contractor?" The point you are missing is that the incumbent (according to the FAR) is not a small business at that time. So the actual question you are asking is "Why not let an "other than small business" compete as a small business and take advantage of benefits to which it is no longer entitled?" Right? GT

Mon, Sep 21, 2009 Allen

This bill seems to reward mediocrity. It will allow a business to win a contract and then just sit back and milk that contract for the foreseeable future and put no effort into finding other work and trying to grow. If the business has completed a contract and hasn't found other work to let them continue to grow, then business Darwinism should be allowed to cycle that business back to dust.

Fri, Sep 18, 2009 David

On Thursday, Griffith released a statement in response: "If passed, this bill will put an end to an outdated regulation on small business that punishes our entrepreneurs for their own success. This regulation puts a ceiling on motivation to grow small business, effectively putting a cap on how far our local economies can develop. That is the exact opposite of the American dream. This is a pro-small business bill that supports and promotes our men and women who build success stories from the ground up."

The bill does have some support from the business community. Don Bishop, CEO of Indyne Inc., an information technology provider for government clients, said, "I have a hard time believing small businesses would have a problem with this."

He said as far as he understood the legislation, the bill would give a cushioning effect as small businesses grow from one level to another. "I would have loved to have it when we were starting out," he said.

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