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Small, Local Companies Lag on Stimulus Contracts

More than 90% of contract dollars under the economic stimulus act have been awarded through existing contracts according to the market research firm Input.

Contracting officers typically use task order contracts to speed and simplify the award of new work. Montana Sen. Jon Tester says that means “the big boys” are getting too big a share of stimulus money.

The Input report showed that through May 27, small businesses had received only 11% of contract dollars under the Recovery Act.

As an example, Tester pointed to contracts to build border stations in his state. He said the work was awarded to large out-of-state construction companies under an IDIQ contract that shut out local firms.

“I think it represents backwards, business-as-usual thinking to give the contracts away to the big boys,” the Democrat commented at a hearing of the Senate Homeland Security and Governmental Affairs Committee. “And I am one of those who does not think that bigger is better. I think that small business is critically important to this country.”

At the June 3 hearing on the nomination of Martha Johnson to head the General Services Administration, Tester insisted he is not seeking preferential treatment for local companies: “Don’t tilt the playing field. Let’s just make sure it’s level.”

Input found that agencies are following the congressional directive to award contracts competitively in 90% of the cases. But only 18% of the dollars have gone to fixed-price contracts, the Obama administration’s preferred contract type.

The administration acknowledged that only 5% of the $787 billion stimulus package has been spent in the first 100 days. President Obama and Vice President Biden said the pace will accelerate over the summer. They released a list of upcoming projects at 107 national parks, 98 airports, 90 veterans medical centers and more than 1,500 highways. (For details, go to www.whitehouse.gov/recovery/.)

“Every 100 days, if we’re doing this right ... should produce more than the last 100 days,” Biden said at a June 8 cabinet meeting.


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