Small biz vendor pool shrinking

The number of small firms registered as vendors with the federal government has dropped by 29% since 2012, Rep. Steve Chabot, R-OH, chair of the House Small Business Committee, said in a recent committee report.

From 382,092 small businesses in 2012, the number fell to 273,072 in January 2015, Chabot said. “This speaks to a greater problem in the industrial base--a declining participation rate,” the report said.

Also, while the number of small business contract actions fell by 60% from fiscal 2011 to fiscal 2014, the average size of those contract actions grew by 230%.

At the Defense Department, the number of such contract actions fell by 70% and the average size increased by 290%, he said.

“This reflects that fewer small businesses are winning contracts, but those contracts are worth more, which may indicate that some small businesses are doing very well but many others are losing opportunities to compete,” Chabot wrote.

Furthermore, Chabot asserted that the decline in number of contract actions with small firms cannot be explained by shrinking budgets or sequestration alone, because during the same period, contract actions with firms that were not small increased by 8%.

Chabot said the provisions in his small business procurement reform bill, HR 1481, address the problems (see committee report below and related story ).

More Information: Committee report: https://goo.gl/SV1eOy

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