Barriers and Opportunities for Small Business Contractors
WASHINGTON – Today, the House Committee on Small Business Subcommittee on Contracting and Infrastructure heard from small business owners and experts on the barriers and opportunities that exist for small business contractors in the federal procurement marketplace.
“The federal government has long stood by the policy that the government should aid, counsel, assist, and protect the interests of small business concerns in order to maintain the strength and overall economy of our nation,” said Ranking Member Pete Stauber (R-MN).
Solutions Offered by Contracting Experts
“When a prime contractor sets a subcontracting goal, they are required to show a “good faith effort” to meet it. The definition of this effort is ambiguous and can be interpreted loosely—much to the detriment of small businesses. Not all, but some large companies take advantage of this unspecified term, which leads to more of ‘checking the box’ instead of working towards meeting the goals set forth in their subcontracting plans,” said Ms. Dorothy Ann Callahan, Principal, D. Callahan, LLC, in Olney, MD. “I support the Committee’s proposal that the good-faith standard should be removed and instead primes should be assessed on a pass/fail basis.”
“The Section 809 panel recommending eliminating small business set-asides in exchange for a 5% price preference at the Department of Defense. Small businesses have everything to lose with this change,” said Ms. Belinda Guadarrama, Founder & CEO, GC Micro, in Petaluma, CA. “We strongly encourage the Committee to support the more than 51,000 small business contractors who support the DoD’s mission by preserving the contracting programs that fulfill the nation’s policies of ensuring a healthy industrial base.”
“When you look at those percentages [on the annual Small Business Administration scorecard], you sometimes have trouble putting [the numbers in context],” said Mr. Bruce Lansdowne, President & CEO, Trinity Technology Partners, in Greenbelt, MD. “The chamber recommended that we show the actual [subcontracting] dollars, so it can be more real for subcontractors [and] the general public who has access to those scorecards. It just would make it more clear as to really how many dollars are being spent in the subcontracting arena.”
“On construction industry contracts the federal government has the ability to hold up to ten percent of the contract price until satisfactory completion of the work. The process of withholding money from a contractor is commonly referred to as retainage,” said Mr. Thomas J. DePace, CTS, C.O.O. & Sr. Engineering Manager, Advance Sound Company, in Farmingdale, NY. “One immediate way to mitigate the degree of financial exposure from federal retainage is for the federal government to… lower the overall rate of retainage that federal contracting officers may charge. This would put more liquidated funds in the pockets of America’s small businesses, and likely decrease the overall cost of federal construction projects.”