OFPP says procurement reform not hurting small biz

Federal agencies plan to award at least 69 percent of prime contracts for professional and technical services to small businesses during the next two years according to a survey conducted by the Office of Federal Procurement Policy.

Most of these task-order contracts will be for information technology said OFPP administrator Steven Kelman although the results released last week did not include an industry-by-industry breakdown. Kelman said he asked for the data to show that procurement reform is not leading agencies to hire only large firms."Some of the critics have been trying to argue that task-order contracts are the enemy of small business " he said.

The administration is fighting a bill introduced by Sen. Christopher "Kit" Bond (R-Mo.) that the administration argues would prohibit acquisitions that let agencies compete task orders among a specific set of vendors rather than let new contracts for each project.

Because new acquisition laws made it easier for agencies to hire vendors through tasks on multiple-award contracts small companies fear more business is going to the large firms that have won most of these pacts. "Even the awarding of task orders still requires you going around and being in front of the right people at the right agencies to get that work " said Henry Frain president of Compusearch a small business in McLean Va. "Those that don't have the sales force of the right size to do that are greatly handicapped."

The OFPP data does not cover all planned contracts only major awards that 21 agencies anticipated within the past several months. Some agencies including the departments of Transportation Health and Human Services and the Interior did not have any information.

Out of 526 prime contract awards that agencies plan they expect to set aside 172 prime contracts for any small business and 193 prime contracts for small disadvantaged businesses according to the survey.

Kelman said small firms could try for the rest under full and open competition although the agencies reported some contracts would probably be too large for them to win.

The majority of these contracts would be single-vendor awards rather than awards to multiple vendors that would compete for individual tasks. Kelman said the number of single-vendor awards to small businesses shows that "task-order contracting is [not] incompatible with small-business awards at the prime contract level."

A recently published study by the Small Business Administration's Office of Advocacy concluded that before procurement reform - between fiscal 1991 and fiscal 1995 - agencies may have given more business to large companies but in the IT services area contracts and spending increased. By fiscal 1995 large companies had captured a greater share of revenues from IT services contracts but the study's results did not reach any conclusion as to whether this trend came at small firms' expense.

Some vendors and agency officials contend that it is up to individual agencies to make contracting with small businesses a priority especially now that it is easier to compete large contracts. "It's a big effort to ensure that nothing falls through the cracks during this transition period " said Tony Diamond small-business adviser for NASA's Office of Small and Disadvantaged Business.

"Unless the SBA rep is really involved and has the say-so then you're not going to have anyone there as the watchdog for small business " Frain said.

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