House Small Business Committee OKs small biz contracting package

The House Small Business Committee approved a wide-ranging bill intended to enhance small business federal contracting.

The bill, which consolidated a number of separate proposals, started out even larger but was winnowed down.

The panel’s chairman, Rep. Steve Chabot, R-OH, withdrew from the bill his earlier proposal to order new metrics for small business subcontracting and industry participation to be reported within the Small Business Administration’s goal achievement scorecard.

Also, the bill does not aim to raise the federal procurement small business goal to 25%, unlike in previous years.

Included in the bill, which was approved as a substitute amendment that replaced the original bill, were provisions to:

• include small business subcontracting goals in agency responsibilities;
• improve data on bundling and consolidated contracts;
• require notice and justification of consolidated contracts;
• allow teaming partners’ past performance to be evaluated separately, rather than only as a team;
• set limits on reverse auctions;
• revise the nonmanufacturer rule;
• set requirements for SBA procurement center representatives;
• and order the GAO to investigate large firms winning small business contracts.

While federal small business awards rose to a record 23% in the most recent SBA scorecard in fiscal 2013--meeting the goal for the first time since fiscal 2005-- Chabot said he is concerned that awards may be going to fewer firms.

Chabot also is concerned that some industries have few small vendors. He referenced a June 2014 report from the SBA Office of Advocacy that found gaps in small business participation by industry. For example, the report said that while manufacturing made up about 40% of federal procurements in fiscal 2012, the small business share was only 12% (See Set-Aside Alert issue of 6/13/2014).

Chabot previously had proposed that the SBA add to its scorecard subcontracting goals in all five socioeconomic categories, as well as data on “the number of each type of small business awarded contracts in each industry each year, and the number of each type of small businessses competing for contracts in each industry each year.”

Federal agencies would be scored on how well they met all the goals, including subcontracting goals.

The purpose of the additional data on small business participation, on the whole and by industry, to be added to the SBA scorecard was to raise awareness about the declining number of small businesses in federal contracting.

From fiscal 2011 to fiscal 2014, small business’ share of federal contracting increased, but the number of small firms and the number of procurement actions affecting small firms fell, Chabot said.

The number of small business contractors in the Dynamic Small Business Search database has dropped by about 100,000 since 2012, when there were 382,000 such businesses, he said.

The number of federal procurement actions with small businesses fell from 3.3 million in fiscal 2011 to 1.4 million in fiscal 2014, which is nearly a 60% drop, Chabot said, adding that “this speaks to a greater problem in the industrial base--a falling participation rate.”

However, Chabot’s scorecard changes were not in the committee’s recently-approved bill.

Alan Chvotkin, executive vice president of the Professional Services Council and a recent witness at a committee hearing, said the committee members generally endorsed the scorecard provisions but decided small changes may be needed to ease implementation.

A potential area of difficulty is in collecting and reporting small business subcontractor data, especially on small business subcontracting done by small businesses themselves, Chvotkin said.

“Right now that data is not easily obtained,” Chvotkin said. “It is not in a central location.”

Chabot, in his statement, emphasized the importance of publicly reporting the subcontract dollars awarded to small businesses, which he said have dropped by 2.5% since 2010.

“Make no mistake about the significance of subcontracting: in FY 2013, small businesses received $86.7 billion in subcontracts,” Chabot said in his statement.

The bill approved by the panel (HR1481) also incorporated provisions drawn from other legislation: HR 1386, Rep. Carlos Curbelo, R-FL; HR 1390, Rep. Steve Knight, R-CA; HR 1410, Rep. Amata Coleman Radewagen, R-AS; HR 1429, Rep. Mike Bost, R-IL; HR 1444, Rep. Richard Hanna, R-NY; and HR 1583, Rep. Cresent Hardy, R-NV.

Also withdrawn was a proposal to establish, by law, ongoing operation of the Office of Hearings and Appeals within SBA to hear appeals of size standards for federal contractors.

More Information: Press release: http://goo.gl/KOY6lg
Committee bill text: http://goo.gl/h2yJxx

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