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Federal Market Intelligence for Small Business |
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Set-Aside Alert news analysis:What’s next for small business federal contractors under a Trump Administration and GOP Congress?The election is over, and the results are in: Donald Trump is the president-elect, and Republicans control both the House and Senate. Small business--and small business federal contractors--got little attention during the campaign, and that is likely to continue for the hectic next six months or so, as several thousand Trump appointees are named to take over key roles in the administration. The GOP business agendas Trump and the GOP Congress have promised an aggressive agenda of cutting business and environmental regulations, reducing corporate and income taxes, and increasing defense spending. Many small federal vendors are hopeful about those plans, especially about possibly greater opportunities in defense procurement, and possibly fewer requirements for being a federal contractor. But the GOP proposals to boost defense will be up against the automatic caps of the Budget Control Act, unless it is repealed. There also would be significant negative impacts, because the increased defense spending would be accompanied by more cuts in civilian agency spending. Trump also wants to shrink the federal civil service workforce through a hiring freeze and attrition. Small business contracting Small business access to federal contracting generally has received bipartisan support, and many vendors are cautiously optimistic that the support will continue. But that support will be tested by the proposed shrinkage in federal civilian agency budgets and workforce attrition. As the number of federal personnel diminishes in many agencies--resulting in fewer contracting officials and small business office staff--there simply may be fewer resources and more delays in awarding small business contracts. There also may be fewer resources for enforcement and reporting. To be realistic, with so much on the table, small business federal contracting issues are likely to be relatively far down the list of priorities for the new administration for several months. One of the factors that could make a difference is to what extent Rep. Steve Chabot, R-OH, chairman of the House Small Business Committee, will be involved in setting policy for small business contractors. He already has signaled he is against category management (see Category Management story). Chabot and the other GOP members on the committee have been strong critics of the Small Business Administration. They are likely to shift away from that approach and take a more active role in policy as members of the GOP take charge of leading the SBA. Small business goals The campaigns offered clues as to what Trump’s views and actions might be on small business contracting issues. President Obama made achieving the 23% goal for small business contracting participation a high priority, meeting the goal for the first time in fiscal 2013 and then twice more. Will Trump also make it a high priority? That is possible, but it seems more likely the goal achievement will be modified in some way. Chabot and the committee have been urging that the small business goal criteria should be overhauled to reflect priorities including “prime contracting, subcontracting, participation rates and industrial diversification,” according to a committee press release. The committee successfully added language to that effect in the fiscal 2016 national defense bill. With GOP appointees soon to be in charge of implementing that language at the SBA, as well as all other small business contracting regulations, they could bring big changes to the metrics for assessing small business participation in federal contracting. Small and disadvantaged Trump made remarks about Hispanics during the campaign that were considered, at best, insensitive, and at worst, racist. He also called the “Black Lives Matter” movement “very divisive.” Based on those views, it would not be surprising if Trump reduced resources for programs with high participation from minorities, such as the SBA’s 8(a) Business Development program and several programs for Native American contractors. He and the Congress may redirect resources to the broader small business category. As for HUBZones and programs for women-owned contractors, it is a big unknown. "President-elect Trump has a lot of work ahead of him to help women entrepreneurs thrive,” Jane Campbell, president of Women Impacting Public Policy, said in a statement. On the other hand, support for veteran small business contracting may continue to be strong, as veterans and defense are traditional GOP priorities. Supporting the SBA, OSDBUs There are likely to be two fairly large changes at the SBA under the new administration: first, fewer new regulations, and a reduction in existing regulations; and second, fewer staff. Trump’s plan for the first 100 days includes getting rid of two regulations for every one new regulation. How far this will go--whether it would reach into small business federal contracting, and whether it would result in fewer rules, less enforcement and possibly more fraud--is anyone’s guess. It is likely that the SBA will have fewer personnel to manage its small business contracting programs. As a result, there may be greater delays in processing applications for programs such as mentor-protege and 8(a). The GOP small business panel members have been highly critical of new programs the SBA initiated on its own, which are mostly various entrepreneurship training programs. Those presumably may be phased out or rebranded under Trump. The existing Offices of Small and Disadvantaged Business Utilization (OSDBU) also are facing possible budget cuts and reduced personnel, except for DOD, where they may be beefed up if the defense budget grows.
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