OMB wants small purchases going to small firms

The Office of Management and Budget wants agencies to buy from small businesses when making purchases less than $3,000 and now track how much spending goes to them, according to a new memo released Dec. 19.

Agencies can identify spending with small businesses through the General Services Administration's SmartPay.

SmartPay can provide reports that include the company’s name, number of transactions and the amount of money.

Also, an agency’s policies may affect the degree of access granted to the data.

In fiscal year 2010 agencies used SmartPay purchase cards to buy approximately $6 billion with small businesses below the micro-purchase threshold of $3,000. It represents roughly 30 percent of the total annual spending through government purchase cards, according to the memo.

Agencies must adjust their cardholder training to get buyers to use small businesses when it's feasible. OMB said agencies should to consider using GSA Advantage! and the Defense Department’s e-Mall electronic shopping web sites. They should also tell their buyers about strategic sourcing blanket purchase agreements for office supplies.

The Small Business Jobs Act requires an analysis of small business participation in governmentwide commercial purchase card micro-purchases and guidelines on awarding more contracts to small businesses when using the purchase cards.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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Reader comments

Mon, Jan 2, 2012 Guy Timberlake Columbia, MD

The previous anonymous comments made on 12/27 ("This is just another example of the Government wasting money...") is exactly the type of short-sighted sentiment that continues to plague small businesses in government contracting. 'Small Business' is a political pawn solely because of the number of votes it represents and the various segments of the population it touches. Be that as it may, purchasing quality goods and services from viable small businesses creates a win for the buyer, seller and the communities that both touch. Many small businesses provide a level of support to their customers long since forgotten by most larger companies. Those "pencils" might be less expensive at the larger box stores because their business practices include destroying opportunities for local small businesses and subsequently driving them out of the market with loss leader pricing. However, the basis of the micropurchase program is on reducing the administrative costs for these types of purchases, which is why most are executed by government employees who are not procurement professionals. Will these new requirements diminish those savings? I stand by my belief that real "Change We Can Believe In" will happen when Simplified Acquisitions (traditionally purchases from $3K to $150K) are "set-aside" versus just being reserved for small businesses, including those processed under the Commercial Items Exception up to $6.5M. FY11 saw over $14B in SAP contract actions, in a compressed fiscal year. A substantive increase from FY10. Guy Timberlake The American Small Business Coalition

Tue, Dec 27, 2011

This is just another example of the Government wasting money for some political reason. When someone is spending taxpayer dollars to make necessary purchases of supplies the only consideration should be which supplier provides the best deal. What legitimate purpose does it serve to go to a small business to buy pencils for $20 a gross when we could get them from WalMart or Target for $10 a gross? Government policy should always favor that which gets the taxpayer the biggest bang for the buck. It is not the Government's place to spend more money than is necessary just to prop up some politically favored class of business.

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