Defense bill would boost small business contracting goal

The House Armed Services Committee has proposed raising the government’s annual small-business contracting goal and giving business advocates more authority throughout the acquisition process.

The fiscal 2013 National Defense Authorization Act (H.R. 4301) would have the government set the overall contracting goal at 25 percent of the total value of all prime contracts for each fiscal year, not 23 percent as it currently stands. The government would also have to strive to award 40 percent of its subcontracts to small businesses.

The goals for individual categories of businesses, such as companies owned by women or service-disabled veterans, would remain the same.

“Improving small business opportunities for federal contracts is a triple play,” Rep. Sam Graves, chairman of the Small Business Committee, told the committee in testimony in April. Small companies win more contracts, which create jobs. The companies also bring more competition and innovation to the market. The government saves money through competition and the industrial base stays healthy. He urged the committee to add small-business provisions into the bill.

In a recent report, a special panel of Armed Services Committee members concluded that small businesses face particular challenges in contracting with the Defense Department. DOD lacks a culture that fosters small business participation. More broadly, DOD has a confusing acquisition rulebook that constantly changes.

As a result, the authorization bill would elevate the role of the small-business advocate within DOD. It would require officials to write up guidance to ensure the director of each of the small business programs participates in the requirements development phase of an acquisition and the decision-making process.

In addition, the bill would strengthen and clarify the role of DOD’s procurement center representatives, who advocate for small businesses within the department. The representatives would be able to review and make recommendations related to acquisition plans and procurement methods.

DOD would also have to designate an official in each defense audit agency to consider small business issues. They would advise their agency on small-business matters and be the primary point person for companies. Furthermore, they would develop ways for the agency to finish small companies’ audits faster.

The bill would expand the definition of a bundled contract and eliminate procedures related to contract consolidation. It would exclude contracts under $2 million dollars generally, or contracts under $5 million for construction, from the definition of a bundled contract. It would exclude contracts for major defense acquisition programs.

About the Author

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

Reader Comments

Tue, Aug 13, 2013 Army Contracting Officer

Small Business Owner, bundled requirements are not a violation of the FAR. Bundled requirements that exclude small businesses are a violation of the FAR. The CHESS ITES Contract includes several small businesses, and a few of the small businesses' under this contract experienced a change in status (growing to a larger business) while still under the contract. This meets an intent of the small business program, which is grow small businesses.

Wed, May 16, 2012

The government only counts Small Business contracts they award directly to Small Businesses. The government doesn't count the other 10% to 23% Small Businesses have on contract that is mandated on many goverment contracts that a large business prime is required to support. I would say the Small business goals are being surpassed, if the government accounted for all the Small Businesses working both direct and as a subcontractor to other large and small businesses. The problem is visibiilty of the numbers and the misleading government policies that don't allow accurate figures to be reported.

Wed, May 9, 2012 Mariano Tellarini

I basically agree with both comments. On the other hand, I wonder how much effort and attention the small business community puts on getting thoughtful comments, compelling feedback and even clarification requests out to the government contracting parties?. How many businesses truly understand the concept -and benefits- of developing strategic RFI responses? How many participate in collaborative, concerted responses? Have small businesses done enough to let contracting officers and even legislators know about the benefits of having GWACs and IDIQs programs developed exclusively for small businesses? (With an emphasis on exclusively; Not just a mix of restricted and unrestricted access). I think the government is truly interested in fixing their acquisition process. They should just start holding serious conversations with all stakeholders around the size, scope, terms and complexity of the contracts small businesses are encouraged to participate in, either as a prime or a sub. First, let everyone understand (hopefully agree upon) the characteristics of the field the game is to be played in and then worry about selecting the players. Otherwise, what good does it do to have a fixed % of guaranteed business to the small business community if that business is then regarded to be beyond their scope and capabilities?

Wed, May 9, 2012 Small Business Owner

I agree with Jamie, the DoD acquisition process is broke and to make matters worse DoD leadership either doesn't understand or care that the goal of these changes are to improve the economy, it's not a welfare program for small business. If properly implemented it would also save the US tax payer a fortune but again that is not a concern for DoD leadership. The Air Force initially makes 8 of 9 awards to small businesses for the $6.8B NETCENTS-II Products Contract which looks good on the surface but this will be a multi-year contract and the Air Force has stated NETCENTS will be mandatory use for anything IT. Under this model the Air Force will crush their small busines goals and they will take fantastic care of 8 small businesses (wait, make that 7, one has already been purchased) but how many small businesses are removed from consideration for the next several years? The Army has been guilty of the same thing the last several years with their mandatory use contract, ITES. Both agencies have bundled requirements (FAR violation) and established a scope that removes most small businesses from consideration. This isn't rocket science, DoD leadership should be embarrassed!

Tue, May 8, 2012 Jaime Gracia Washington, DC

I applaud the efforts by Rep. Graves, but the goal of 23% is not being met, so instead of focusing on the issues of why this is occurring, he outlines a plan to raise it? His legislation is vague on how this will be achieved. Further, subcontract management is currently an afterthought. This lack of accountability by procurement officials is currently allowing small businesses to be used and abused continuously. Again legislation is silent on this serious and important issue. Fix the disease Congress, not the symptoms!

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