Clinton order gives small biz federal boost
- By Diane Frank
- Oct 16, 2000
Executive Order on Opportunities for Disadvantaged Businesses
President Clinton issued an executive order this month to boost small and
disadvantaged businesses' share of the federal contracting market and to
emphasize agencies' individual responsibilities.
The order relies on the traditional method of funneling federal business
to small and disadvantaged companies by asking agencies to set goals for
the percentage of their contracting dollars that will go to small, woman-
and minority-owned businesses, including a new goal that 5 percent of prime
contractors must be small, disadvantaged businesses. But Clinton also set
requirements that include asking agencies to train contracting and program
personnel and that require agencies to submit certain types of contracts
Clinton's order also gives the Office of Management and Budget oversight
over the process in an effort to meet complaints from the small-business
community. Complaints include the fact that there is no way to prove that
agencies have met the percentage goals they have set and the perception
that the Small Business Administration cannot enforce its regulations.
"There is a perception that [SBA] needs some help," said Sally Katzen,
deputy director for management at OMB.
Perception is the name of the game when it comes to small-business contracts,
according to many observers. Federal and industry officials disagree about
whether small businesses have been helped or hurt by procurement reform,
whether the total federal contract dollars and percentage of federal business
awarded to small and minority-owned businesses is increasing or decreasing
(see box), and whether small- business subcontractors are getting their
share of the work and money that prime contractors report to agencies.
That last point has been so contentious that Clinton specifically made
a note of it in his executive order, including a reiteration of the penalties
for false reporting and the intent to use those penalties to persuade prime
contractors and agencies to report accurately, said Linda Williams, associate
administrator for policy planning and liaison in SBA's Office of Government
Contracting and Business Development.
Under the order, agencies must submit a long-term plan to the OMB director
within the next three months on how they will comply with the order's requirements.
Each agency also will annually assess its efforts to comply, submitting
a report to SBA that OMB will then review. Although Katzen would not say
whether OMB would start withholding budget dollars to agencies if the reviews
are negative, she did say the reviews would be a factor.
"OMB's involvement means that an agency will take this even more seriously
than if it were SBA alone," she said.
"It's nice to hear that people are finally listening to what we've been
saying out in the community, which is unless there is buy-in from the top,
this isn't going to happen," said Valerie Perlowitz, president and chief
executive officer of Reliable Integration Services Inc. and chairwoman
of the Industry Advisory Council's small, minority- and woman-owned business
SBA is encouraged by OMB's new role because the review of strategic
plans will help enforce the requirements, Williams said.
But other requirements in the order will require more day-to-day work
for federal contracting officers and vendors. Under the requirements, agencies
must initiate training for procurement and program officials on federal
and agency policies regarding the use of small and disadvantaged businesses
and designate a high-level administrator to oversee agency efforts.
Agencies also will have to submit to SBA any proposals for contract
bundling, combining several small contracts into a large contract that may
make it difficult for small businesses to bid on, Williams said. A study
by Demo—-crats on the House Small Business Committee that was released
in September noted that bundling caused the overall number of small-business
contracts to decrease at almost every agency.