No pain, no gain on small-biz goals
Census Bureau applies pressure via contract award fees
Agencies can pressure prime contractors with tough consequences to make them adhere to their small-business subcontracting goals, but some lawmakers wonder why agencies arent under the same pressure to meet their own goals.
The Census Bureau, for example, urged two prime contractors working on its 2010 census to meet their planned small-business subcontracting goals. In the contract language, the bureau warned them that their award fees for doing good work would otherwise be in jeopardy.
Preston Jay Waite, deputy director at the Census Bureau, said Lockheed Martin must send 31 percent of the contracts total value to small businesses. Meanwhile, Harris must send 21 percent. However, if bureau officials find that either company is lagging behind or not working to meet the goals, the bureau could withhold as much as 25 percent of Lockheed Martins award fee and 33 percent of Harris award, Waite said.
If you want accountability, you have to have some kind of penalty, Waite told the House Oversight and Government Reform Committees Government Management, Organization and Procurement Subcommittee Sept. 26. If those contractors failed to meet the goals, they didnt get as much profit.
Although Census has put provisions in its contracts to ensure it meets its goals, many other agencies have not been as
determined. The Small Business Administration found in August that half of the major departments failed to reach small-business goals in fiscal 2006.
And for those agencies that fall short, there is little repercussion. Agencies are supposed to award 23 percent of all contracting dollars to small businesses. They also are expected to award certain percentages of contracting dollars to 8(a) businesses, companies in Historically Underutilized Business Zones, and those owned by minorities and service-disabled veterans.
Rep. Edolphus Towns (D-N.Y.), subcommittee chairman, said agencies dont face penalties, such as a hold on funding, if they miss small-business contracting goals. It is a problem, and they even acknowledge now its a problem, Towns said.
He said he hopes agency officials will solve the problem on their own.
Agency officials offered some suggestions to Towns. Calvin Jenkins, SBAs deputy associate administrator for government contracting and business development, said a first step is publicly presenting an agency with a failing score if it deserves it.
Part of the problem may be organizational. In some departments, directors of the offices of small and disadvantaged business utilization do not report directly to their agencies leaders or their deputies, as the law requires, said William Shear, director of financial markets and community investment at the Government Accountability Office.
The decision regarding who gets each federal contract ultimately rests with the agencies contracting offices, not with [the advocates] and not with SBA, Shear said.