SBA gives agencies more 8(a) buying power

The Small Business Administration wants to streamline the way agencies award

contracts to socially and economically disadvantaged small businesses.

In a proposed rule issued in the Federal Register last week, SBA said

it wants to delegate to agencies the authority to act as a prime contractor

when awarding contracts to 8(a) companies. The move should reduce the time

it takes to award a contract by up to 12 days, and make the 8(a) program

more attractive.

Currently, when an agency wants to make an award to an 8(a) firm, it

sends its recommendation, or an open requirement for work, to SBA, which

makes the award. The proposed administrative change would allow an agency

to make the award to an 8(a) on behalf of SBA without SBA intervening.

The decision to streamline the 8(a) procurement process reflects what

is happening in the rest of government, said Darryl Hairston, deputy associate

deputy administrator for government contracting and business development

at SBA. Multiple award contracts, governmentwide acquisition contracts,

federal supply schedules and credit cards are common practices now. But

the 8(a) program has not kept up.

"This eliminates several days of [the process] where [agencies] send

an offer to us and we would intake that offer and process it and send out

an acceptance letter," Hairston said.

Meanwhile, SBA will still determine whether a company is eligible for

the 8(a) program, but will do so on an annual basis rather than a contract-by-contract

basis. SBA will maintain a list of 8(a) firms in its PRO-Net database.

The proposed change would put into regulation what SBA has already been

doing, said Bob Welch, former procurement executive at the Commerce Department

and now vice president of government operations at Acquisition Solutions

Inc. This is also just the first step in revamping the entire 8(a) program.

"It's time for SBA to become a player, not a regulator," he said.

If SBA uses the additional time to focus on business development, then

this proposed change is a "good thing," said Woody McCutchen, president

and chief executive officer of the Association of Small Business Development

Centers, which ensures that small businesses receive management assistance.

"The 8(a) program is not just a procurement program, it's a business development

program," he said. "Most of the complaints from the Hill have been that

[SBA] doesn't really use the program to help with the business development

skills and infrastructure needs [necessary] to compete in the open market."

Still, SBA must provide guidance and direction to agencies and manage

the process closely if it is to succeed, said Valerie Perlowitz, president

and chief executive officer of Reliable Integration Services Inc. "It's

great on one hand, but who will check to make sure it's aboveboard?" she



To be eligible for the 8(a) program, a company must be a small business

at least 51 percent owned and controlled by one or more socially and economically

disadvantaged individuals.

In fiscal 1999, about 6,000 small businesses participated in the 8(a)

program and $6.2 billion was awarded in contracts. In fiscal 1998, 209 firms

received 50 percent of the 8(a) contract dollars.

Source: General Accounting Office


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