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Federal Market Intelligence for Small Business |
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Top 18 small business federal contracting stories of 2018 - Part IINote: Part I was published in the Jan. 4, 2019 edition of Set-Aside Alert. #9 - Government hits 23% goal again The government reached the 23% small business procurement goal for fiscal 2017, the fifth year in a row that the goal was attained. Small business obligations rose to $105.7 billion, from $100 billion in the previous year. However, the percentage of small business procurements fell to 23.88%, down from 24.34% in fiscal 2016. There were decreases in each of the socio-economic categories. Procurements from small disadvantaged firms dropped to 9.1%, down from 9.53% the year before; Women-Owned Small Business (WOSB) procurements were 4.71%, down from 4.79% the year before; and HUBZone procurements were 1.65%, down from 1.67%. #10 - IG report on women-owned firms The Small Business Administration’s inspector general found serious shortcomings with the SBA’s WOSB contracting program. Fully 89% of the sole-source contracts awarded under the program were not compliant with regulations, the IG said. Those improper contracts totaled $52 million, which was 81% of the total value of sole-source WOSB contracts. Most of the problems arose from absent or incomplete documentation certifying that the firms were owned by women. #11 - SBA/IG dispute on WOSBs The SBA inspector general’s report on women-owned small business contracting, referenced above, also brought to light an open disagreement on WOSB sole-source authorities. The SBA authorized sole-source awards to women-owned small firms based on the 2015 NDAA. However, the IG’s office asserts that the law only allowed such awards on the condition that the SBA would set up and operate a certification program for WOSBs. While the IG cited the lack of such a certification program as a shortcoming, the SBA had not resolved that problem at the time of the report. To date, there is no SBA program for certifying WOSBs, and WOSB contractors are either self-certifying or using third-party certifiers. #12 - SAM.gov fraud and overhaul The online System for Award Management (SAM.gov) caused small business contractors many headaches starting in April and extending into late June. First, there were reports of alleged frauds in which some vendors saw their bank information in SAM changed without their knowledge. Thousands of contractors were required to send in letters to verify their accounts, and passwords and login information later needed to be changed. #13 - Category management goal set President Trump’s Management Agenda, released in March 2018, announced a goal of saving $18 billion by the end of 2020 by applying category management to “common spending” by federal agencies. The president aims to apply category management to 70% of common spending, which includes purchase of things like office furniture and supplies. Category management goals are a serious concern for small business federal contractors, because areas in which category management is applied tend to see significant shrinkage in the number of firms that win contracts. Typically, once a category of goods or services is strategically “managed,” a relatively small number of firms are allowed to compete for awards in that category. When a category becomes managed, the number of small vendors competing in the category generally falls steeply. But the dollar amounts awarded generally rise for the selected few small firms that remain in the category, and may rise by a lot. #14 - OASIS SB on-ramp GSA officials announced that their “OASIS Small Business” multiple-award acquisition vehicle for professional services is planning to expand to 500 contractors in Pools 1, 3 and 4. Most of the turnover is anticipated in Pool 1, where a large number of no-longer-small firms will no longer be able to compete for contracts as of April 2019. #15 - SDVOSBs vs. AbilityOne In October, the Court of Appeals for the Federal Circuit ruled that the Veterans Affairs Dept. is required under a 2006 law to give top priority in contracting to service-disabled veteran-owned small businesses, under the “Rule of Two,” even when it buys AbilityOne items. The court addressed the apparent conflict in laws because the AbilityOne procurements, under a separate law from 1938, are supposed to go only to contractors with three-quarters of its labor from disabled workers. The court decided that Congress must have intended the VA law to supercede the older AbilityOne law, because Congress presumably was aware of that older law when it passed the new law. #16 - SBA lax on 8(a)s An audit of the SBA’s 8(a) Business Development program showed that ineligible firms are slow to be removed, the SBA’s Office of Inspector General reported in September. The OIG audited 25 firms in the 8(a) program and found that 20 of the firms should have been removed as ineligible. Those 20 firms received $127 million in new 8(a) set-asides in fiscal 2017. #17 - Sect. 811 for ANCs The Army, Navy and Air Force reportedly agreed to follow reinterpreted guidelines for sole-source contracts for Alaska Native Firms. Sen. Daniel Sullivan, R-AK, led the effort to modify how the Defense Dept. carries out the justification and approval process for sole-source contracts above $22 million for ANCs under Sec. 811 of the fiscal 2010 national defense authorization. Sullivan and others argued that Sec. 811 previously was interpreted in such a way that it hindered such contracts, and he worked to reduce the impact. #18 - Big plans that didn’t happen The year 2018 also was notable for big plans that never got off the ground. One such plan was President Trump’s proposed $1.5 trillion infrastructure improvement plan, which likely would have given a big boost to small businesses. Another was the president’s plan to consolidate all small business contracting programs at the SBA, including programs at USDA, DOT, Treasury and the VA.
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