BACKGROUND:
Congress has long held that small businesses are critical to the United States economy and as such, the federal government has a unique responsibility to ensure the growth and success of small businesses within the federal ecosystem. To promote these greater goals of economic growth and the success of small businesses, the Small Business Act establishes that the SBA operate a variety of federal prime contracting programs designed to provide small businesses with federal contracting opportunities. The purpose of these programs is to provide a safe harbor in which small contractors can grow and mature their capabilities and networks so that they may eventually become vital partners to the federal government providing valuable goods and services, driving up competition and decreasing costs to the taxpayer. Federal prime contracting programs maintained by the SBA include: the 8(a) Business Development program in which eligible participants are socially and economically disadvantaged individuals, the Historically Underutilized Business Development Program in which eligible participants operate within economically underserved communities, the Women-Owned Small Business Program, the Service-Disabled Veteran-Owned Small Business Program, and the All-Small Mentor-Protégé Program.
Unfortunately, there has been a significant decline in the number of small business contractors, particularly among new entrants. Considering that small businesses consist of a significant share of contractors, particularly subcontractors, to the federal government, this erosion of the federal small business industrial base poses significant danger to our national security and economic growth. Contract consolidation and bundling strategies currently utilized by the federal government decrease prime contracting opportunities for small businesses, pushing opportunities downwards to the subcontracting levels. This forces small businesses to increasingly rely on large prime contractor companies for federal work.
Democrats have engaged in a misguided push toward increasing contracting dollars toward small businesses without contemplating current deficiencies in the way dollars are counted. Inaccuracies in dollars reported continue to persist which must be rectified before any mandated expansion of dollars flowing to small businesses will be useful. Additionally, Democratic efforts focusing primarily on increasing contracting opportunities for only minority-owned small businesses unfairly isolate all other small businesses who also share in the same challenges as minority-owned small businesses and could also benefit from such proposals.
GOALS:
-Ensure accuracy and accountability in federal dollars reported as going to small businesses
-Protect valuable prime contracting opportunities and subcontracting opportunities available to small businesses in the federal marketplace
-Increase oversight over the SBA’s management of its federal contracting programs
SOLUTION:
IMPROVE the SBA Act, Title IV — Small Business Administration Contracting Programs
This section requires annual testimony from the SBA Office of Government Contracting & Business Development to ensure the SBA is properly managing and tracking the outcomes of its federal contracting programs. This section also enhances accountability and accuracy in federal dollars reported as going to small businesses by eliminating duplications in dollars counted. This section also protects valuable prime contracting and subcontracting opportunities by instituting measures that will increase large prime contractor accountability in meeting their subcontracting goals.
ADDITIONAL LEGISLATION AND ENGAGEMENT:
Expanding Contracting Opportunities for Small Businesses Act of 2021 | May 7, 2021
H.R. 3065 increases the allowable award price for federal government contracts with certain small businesses, including socially and economically disadvantaged small businesses, small businesses owned and controlled by women, and small businesses owned and controlled by service-disabled veterans. Introduced by Rep. Maria Salazar (R-FL) | Original House Cosponsors: Reps. Marie Newman (D-IL); Pete Stauber (R-MN); Aumua Amata Coleman Radewagen (R-AS); Dwight Evans (D-PA)
Letter to SBA Administrator Guzman and Chief of the Office of Size Standards Sharma Expressing Concerns with the SBA's Non-Manufacturer Rule | July 19, 2021
Letter from all Subcommittee on Contracting and Infrastructure Republican Members to SBA Administrator Guzman and Khem Sharman, Chief of the SBA Office of Size Standards, urging an investigation into the SBA’s non-manufacturer rule, arguing that it could lead to less federal funds reaching small businesses. Signees: Reps. Maria Salazar (R-FL); Jim Hagedorn (R-MN); Pete Stauber (R-MN); Dan Meuser (R-PA); Scott Fitzgerald (R-WI)
Letter to SBA Administrator Guzman Regarding Subcontracting Goals | May 19, 2021
Letter from all Subcommittee on Contracting and Infrastructure Republican Members to SBA Administrator Guzman requesting implementation of the rule required by Section 1614 of P.L. No. 113-66, the National Defense Authorization Act for Fiscal Year 2014, permitting prime contractors to obtain subcontracting credit towards their subcontracting goals at all tiers, and prohibiting the establishment of a secondary subcontracting goal. Signees: Reps. Maria Salazar (R-FL); Jim Hagedorn (R-MN); Pete Stauber (R-MN); Dan Meuser (R-PA); Scott Fitzgerald (R-WI)
Letter to President Biden Requesting Concerning the Defense Production Act | March 31, 2021
House Committee on Small Business Ranking Member Blaine Luetkemeyer (R-MO) and Representative Maria Salazar (R-FL), Ranking Member, Subcommittee on Contracting and Infrastructure, sent a letter to President Biden requesting that he carefully consider the impact on small businesses before invoking the Defense Production Act. Signees: Reps. Blaine Luetkemeyer (R-MO); Maria Salazar (R-FL)
