Set-Aside Alert news analysis:

Top 17 Small Business Federal Contracting Stories of 2017

      Now that 2017 is over, we can all take a deep breath and acknowledge that it was a very disruptive year in Washington. Priorities shifted, tempers rose and fell, the air was filled with tweets, and previous rules and practices were erased or redrawn at record speeds.

      With so many big stories, the little stories got short shrift. Small business federal contracting made but a few headlines in the major news outlets.

      The Small Business Administration got a feisty new director who received little attention other than for her colorful former career as a wrestling entertainment producer.

      The New Year has begun, and the news never ends. But before we look ahead, here is a look back at Set-Aside Alert’s picks as the Top 17 Small Business Federal Contracting Stories of 2017.

#1 Ethics and Civil Rights

      One of the greatest adjustments for small business federal contractors in 2017 was to adapt to an environment of sharply different ethics and attitudes emanating from the White House. The hottest controversies involving President Donald Trump have been about his ethics and his attitudes about civil rights, women’s rights, freedom of speech, freedom of the press, truth and justice. Trump has displayed very different perspectives than his recent predecessors in these areas.

      To name one example, Trump has refused to release his tax returns showing what businesses he owns, how much money he owes and to whom, and so on. The public needs such information to monitor whether an elected official is using his or her office for personal gain. Former presidents Barack Obama and George W. Bush, along with nearly all presidential candidates from the last several decades, have released their tax returns.

      In addition to bringing a change of tone on ethics, the president has set a different tone on civil rights and freedoms. He has proposed actions that reflect his attitudes. For example, he has asked for deep cuts to the U.S. Equal Employment Opportunity Commission, federal civil rights enforcement offices, the Minority Business Development Corp. and the Office of Federal Contract Compliance Programs, which polices discrimination in federal contracting.

      The ethics and attitudes on display in the highest office of government may be contributing to public perceptions of increased corruption. According to surveys by Transparency International, in November 2017, 44% of Americans said corruption is pervasive in the White House, compared to 36% who said the same in January 2016.

      Just as a corporate CEO’s ethics and attitudes tend to influence all levels, so Trump’s attitudes may be having an impact in broad areas, including federal contracting: Is federal contracting still generally viewed as fair and nondiscriminatory? Do people believe favored contractors are more likely to get a pass than before? Are small business owners, especially minority and women owners, encouraged or discouraged about the ethics and equal rights protections in the current federal market? Set-Aside Alert will continue to explore these important questions in 2018.

#2 Federal Budget Shifts

      The dramatic shifts in presidential and legislative priorities that occurred in 2017 are likely to have big effects on small business federal contractors in the next several years.

      In 2017, the GOP majority in Congress, which previously had been highly critical of increasing the deficit, reversed itself and authorized up to a $1.5 trillion increase in the deficit to pay for tax reductions. With the deficit on the rise, there will be political pressure to reduce federal spending, including contract spending.

      But GOP lawmakers also want to expand defense spending. Congress authorized a fiscal 2018 defense budget of $700 billion, which far exceeds the $549 billion caps mandated by the bipartisan Budget Control Act of 2011. Lawmakers would need to legislate separately to overrule the caps in order to carry out the defense spending hike. If they succeed, there potentially would be more opportunities for small businesses in defense contracting.

      The fiscal 2018 spending bills are not yet completed, and House GOP Majority Leader Paul Ryan has said the Republicans intend to pay for the additional military costs by cutting Medicare, Medicaid and Social Security. That would hit small business contractors in those programs.

      Spending in other programs viewed as low priorities by the Trump Administration--including environmental, scientific and medical research, and international trade and diplomacy programs--also are likely to see reductions, which would negatively impact small business vendors in those areas.

#3 The NDAA

      The National Defense Authorization Act for Fiscal 2018 had a large number of provisions affecting small business federal contractors. Here is a quick rundown of the major changes:

• HUBZone maps will remain the same until 2020, and then change every five years. There are new rules allowing governors to nominate zones, and a new requirement that decisions on HUBZone applications be made within 60 days.
• Under Section 805, the Simplified Acquisition Procedures threshold would be raised to $250,000, from $100,000. In Section 806, the micro-purchase threshold would be increased to $10,000, from $3,000.

        Both the simplified acquisitions and the micro-purchases tend to favor small businesses.

• Section 1703 states that agencies would no longer receive credit for small business set-aside contracts in cases in which the small business was acquired--and would no longer be deemed small--after the contract was awarded;
• Section 1704 sets out certification requirements for the SBA’s Business Opportunity Specialists.
• Section 1705 outlines certification requirements for the SBA’s Commercial Market Representatives.
• Section 846 authorizes the development and implementation of one or more e-commerce platforms for commercial items that could be purchased by the Defense Dept. - the so-called “Amazon” provision.
• The DOD would set up a pilot program that would require contractors that protest DOD procurements to the Government Accountability Office to reimburse DOD’s costs if the contractors lose the protest.

        The program begins in 2020 and applies to contractors with revenues of $250 million or more.

• The SCORE program for advising small businesses did not get reauthorized,
• and a Senate provision to lower the employees-living-in-HUBZone requirement to 33% was dropped.

#4 Personnel Changes

      New presidential administrations bring in a new group of appointees aligned with the president, and 2017 followed that pattern, up to a point.

      The difference is that President Trump and several of his Cabinet members have been criticized for not filling vacant senior positions quickly enough, or not filling them at all.

Set-Aside Alert has a new look

Congress faces Jan. 19 deadline

Small biz goal appears met

21% fewer DOD vendors from 2011-2015

DOD awards dropped

GSA sets 1/9 meeting on e-commerce

Why not a 25% small biz goal?

Washington Insider: