The House Armed Services Committee has voted to increase the governmentwide small business contracting goal to 25%, from the present 23%, as part of a wide-ranging overhaul of small business contracting rules.

The 2013 defense authorization bill would also create a pilot set-aside program for companies that have outgrown small business size standards.

The committee recommended the bill by a 56-5 vote. The defense bill is considered a “must-pass,” so it is likely to be debated by the full House before the November election.

However, the bill does not include proposed improvements in the women’s contracting program. The House Small Business Committee had voted to give the women’s program parity with other socioeconomic programs by removing limits on the size of set-aside contracts, but this was left out of the Armed Services Committee’s bill.

“How the Congress can ignore 7.8 million women business owners as irrelevant to the procurement process is beyond me,” said Barbara Kasoff, president of Women Impacting Public Policy.

The Armed Services Committee report said the bill “introduces bi-partisan reforms aimed at the way the Defense Department interacts with the private sector, opening more opportunities for small businesses, increasing competition, and spurring innovation.”

In addition to raising the goal to 25% of prime contract dollars, the bill would increase the governmentwide subcontracting goal to 40%, from the current 35%.

The Obama administration opposes the higher goals, calling them “overly ambitious.” The government has never achieved the current 23% goal.

Section 1611 of the bill would establish a three-year pilot program in DOD for “advanced small business concerns,” defined as companies that have outgrown small business size standards. To qualify, a company must have less than three times the receipts or fewer than twice the number of employees in its size standard. Contracts worth more than $25 million could be set aside for advanced small businesses if no small firms were able to perform the work.

Other provisions of the bill include measures approved by the Small Business Committee and proposals from the Armed Services panel on the defense industry. (SAA, 3/23, 4/6)

•The bill includes several changes designed to lessen the impact of contract bundling on small firms. Agencies would be required to justify any bundled contract or task order above $2 million, or $5 million for construction, whether it was a new contract or a consolidation of existing ones. Agencies would have to give 45 days’ public notice before issuing a bundled contract solicitation.

The administration opposes the provisions, saying they would “place unnecessary constraints” on agencies’ acquisition decisions.

•It would require annual evaluations of senior acquisition executives to include consideration of their agency’s performance in achieving small business goals. It stops short of withholding bonus payments to senior executives when they fail to meet the goals, as recommended by the Small Business Committee.

•It would require that small business offices and procurement center representatives be included in acquisition planning, to strengthen their hand in identifying possible set-asides.

•In setting size standards, the SBA could not adopt a common standard for several industry groups unless it determined that the standard was appropriate for each NAICS code in the group.

•The bill would establish a single set of rules for mentor-protégé programs in all agencies except the Defense Department. The Small Business Administration would set the rules.

•The Secretary of Defense would be required to designate a small business advocate within the DOD auditing agencies, providing a point of contact for small contractors with the Defense Department.

•All OSDBU directors would have to be members of the Senior Executive Service, or equal in rank to the agency’s chief acquisition officer.