November 23 2012 Copyright (c) 2012 Business Research Services Inc. 301-229-5561 All rights reserved.

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  • About half of Simplified Acquisitions go to small biz

    Half or more of the federal purchases under Simplified Acquisition Procedures are going to small businesses, according to two recent studies.

    But whether that percentage represents a success for small firms is being debated.

    The American Small Business Coalition has estimated that about 50% of all simplified acquisition contracts went to small vendors in fiscal 2011, according to Guy Timberlake, chief visionary officer. That amounted to about $8 billion of the $16 billion awarded in simplified acquisitions last year, he said.

    A second study, by Bloomberg Government, looked at a pool of $10.6 billion in awards under the procedures, which did not include indefinite-quantity contracts. Of the awards reviewed, 55%, or $5.9 billion, went to small firms.

    Federal authorities created the simplified acquisition procedures for purchases valued between $3,000 and $150,000 and directed agencies to make the awards to small businesses if certain conditions are met.

    While the simplified procedures do not require the work to be set aside for small businesses, they do provide a growing base of opportunities for small firms, Timberlake told Set-Aside Alert.

    Total spending under simplified procedures rose from $330 million in fiscal 2002 to $16 billion in fiscal 2011, he said.

    The procedures are popular because they are streamlined and quicker to apply, and they ought to be even more popular, especially for companies seeking entry into the government market, he said.

    “It is a great way to get in the door,” Timberlake said. He encouraged small businesses to pursue work under the simplified processes to take advantage of the benefits.

    However, Bloomberg Government described the 55% going to small firms and 45% to large firms as a relative loss for the small firms and a problem that needs to be fixed.

    Five years ago, small vendors got 62% and large, 38%, Bloomberg said.

    Larger companies “take any opportunity to make what are intended to be very limited exceptions to small businesses’ rights into a big-business feast,” Charles Tiefer, law professor at the U. of Baltimore, told Bloomberg.


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