Small-biz advocate Raul Espinosa says agencies skirt rules designed to create contracting set-asides.
As the small-business procurement watchdog who has been challenging the federal agencies' ongoing abuse of simplified acquisitions since 2007, I wish to make one thing clear: The reverse auction procurement vehicle is the future of government contracting for commodities. Small businesses welcome it as a great procurement vehicle – with one exception.
Simplified acquisitions, those worth from $3,000 to $150,000, are supposed to be set aside for small businesses. Agencies have used government reverse auctions to abuse small businesses in a way similar to the rule that exempts the General Services Administration's Federal Supply Schedule program from the set-aside requirement. That is not only my personal view, but the assessment reached by the Small Business Administration and its Office of Advocacy. Since 2008 the rules of reverse auctions have been listed as being among the 10 worst abusers of small businesses on the Office of Advocacy's r3 Initiative, and regulators have done nothing to correct such abuse.
Frankly, the small-business community expects the Government Accountability Office to reach that same conclusion when it rules on a protest I filed (B-406075). Although the statutes make clear that "simplified acquisitions" are "exclusive for small businesses," regulators imposed exemptions on the Federal Acquisition Regulation without statutes to support them. In so doing they were responsible for allowing agencies to divert $64 billion in annual contracts away from small businesses; $44 billion in GSA Schedules contracts and another $20 billion in foreign or oversea contracts destined for military bases and embassies abroad. This abuse has been going on for over a decade and has prevented the government from reaching the 23-percent goal in contracting with small businesses. It also has prevented small businesses from accessing contracts and creating jobs in our economy.
Regulators are now attempting to correct their blunder by introducing an interim rule which would allow set-asides on the GSA Schedules, but only at the discretion of the agencies. It’s like having the government tell us that our inalienable rights would now be offered, but only at the discretion of the government. Regulators need to get it. Simplified acquisitions are exclusive for small businesses and any discretion is only for procurements above $150,000. That’s the law!
Small businesses are expecting for GAO to rule in support of our case and for Congress to call for the investigations the Fairness in Procurement Alliance has requested to bring transparency and oversight to government contracting practices. The rules of reverse auctions and the GSA Schedules procurement vehicle are being used by agencies to avoid small business coordination, to permit noncompliant and unprofessional market research to be used on the acquisition process and to allow preferential treatment to be offered to brands or suppliers.
Borrowing from a famous speech made popular by the Emmy Award-winning movie "Network," small businesses are as mad as hell at the regulations and at the government barriers and they are not going to take their abuse anymore.
We are not going to put up with the lobbying efforts of mega-businesses that have illegally taken small-business contracts, especially simplified acquisitions, away from small businesses for years. Additionally, we are not going to put up with agencies that use barriers to restrict our access to contracts; take credit for small-business contracts awarded to large businesses and then lied about their contracting results with small businesses on the SBA Report Card.
FPA wants consequences for agencies which engage on those violations. Enough is enough, no mas, shame on you!
Raul Espinosa is the founder of the Fairness in Procurement Alliance and Managing Partner of the Umbrella Initiative.