Set-Aside Alert analysis:
Update on year-end legislation for small biz federal contractors
Keeping small firms small for longer; new set-asides for “emerging” firms; biz incubators for Native Americans
Congress just passed a slew of new contracting provisions in the annual defense authorization bill, but the push is on for even more.
There still is time for lawmakers to try to pass additional contracting legislation before the 115th Congress ends its work.
The House Small Business Committee recently jump-started its efforts by approving, with bipartisan support, six bills related to small business federal contracting.
Separately, there is a bill that would establish set-asides for “emerging small businesses” and another that would set up grants for business incubators for Native Americans.
The outlook for action on additional legislation is uncertain, as Congress has another tax cut and unfinished appropriations on its agenda. Also, after four years of Republicans controlling both the House and Senate, the November elections could flip one or both of those chambers to Democrats, which would bring in new priorities.
Even so, a year-end push for new contracting reforms is shaping up. Several significant contracting-related bills are in the end-of-year pipeline. The first six were approved by the House small business panel:
- Small Business Runway Extension Act of 2018, HR 6330, would allow businesses to report to the Small Business Administration their average earnings over the last five years, rather than the last three years.
The goal is to reduce the impact of growth spikes of the companies so that they would be less likely to graduate from being “small.”
- Incentivizing Fairness in Subcontracting Act of 2018, HR 6367, clarifies the conditions for prime contractors to receive credit for their small business subcontracting. They would be required to keep records of their subcontracting credits. The bill also designates agency Offices of Small & Disadvantaged Business Utilization (OSDBUs) to resolve issues of non-payment of subcontractors.
An amendment added by the House small business committee requires subcontractors to inform the prime contractors if they are pursuing a dispute process for non-payment. Also, prime vendors must report on details of what work is being performed by small business subcontractors.
- Encouraging Small Business Innovators Act, HR 6368, modifies the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to make the programs easier to access by small firms, and also allows experienced firms to be mentors.
- Expanding Contracting Opportunities for Small Businesses Act of 2018, HR 6369, would eliminate the requirement that a sole-source award is limited to $4 million for the life of the contract, allowing sole-source awards of up to $7 million per year.
The bill also implements a new eligibility verification process for sole-source awards for veteran-owned and women-owned small firms. In the case of women-owned, it would be a temporary process in place until the SBA creates a certification for the women-owned firms.
- Clarity on Small Business Participation in Category Management Act of 2018, HR 6382, would create a requirement for the government to report on small business participation on so-called Best in Class acquisition vehicles. Once the data is available in SAM.gov, it must be reported.
- U.S. Virgin Islands Small Business Contracting Assistance Act, HR 5929, would give double credit for small business federal procurement to awards made to small firms in the U.S. Virgin islands.
- Anti-Corruption and Public Integrity Act, S 3357, creates broader and more specific definitions of conflicts of interest in federal contracting, and limits the ability of government officials to accept employment in federal contracting.
- Emerging Business Encouragement Act, HR 6565, would create a new category of companies eligible for set-asides in federal contracting: “emerging small businesses.” The category would have its own size standards, reflecting very small firms.
- Stop Outsourcing Security Act, HR 6534, would tighten regulations on use of private security contractors to perform mission-critical activities.
- Native American Business Incubators Program Act, S 607, would set up a federally-funded competitive grant program to support incubators for Native-American entrepreneurs to help them establish and operate profitable businesses. This bill has passed the Senate.
- Federal Acquisition Savings Act, S 3251, would require federal agencies to consider rental any time they are considering procurement of equipment.
More information:
Bill actions, votes and full text: https://www.congress.gov/bill/115th-congress/house-bill/5515/text
