Proposed small-biz contracting goals 'laudable but overly ambitious'

More lawmakers want higher goals for awarding federal contracts, an effort that the Obama administration considers “laudable but overly ambitious.”

Sen. Ben Cardin (D-Md.), along with Sen. Mary Landrieu (D-La.), chairwoman of the Small Business and Entrepreneurship Committee, introduced the Small Business Goaling Act (S. 3213) on May 22. It would raise the annual prime contracting goal by 2 percentage points, from 23 percent of contract dollars spent with small businesses to 25 percent. It also would raise agency subcontracting goals for small businesses from 35.9 percent to 40 percent.

The bill would also put the onus of succeeding at the contracting goals on the senior executives at an agency. Evaluators would have to consider in their performance how they did in meeting the contracting goals. The goals would become another factor in evaluations, along with productivity, efficiency and meeting affirmative action goals.

Cardin said it's obvious that the government needs to use small firms, since they create so many of the new jobs in the country.

“With millions of small businesses out there in every conceivable industry, it makes sense to ensure that we are using and employing their proven expertise in making the federal government more efficient,” he said in a statement.

The idea seems to be gaining momentum in Congress. Rep. Gary Peters (D-Mich.) introduced the Small Business Contracting Opportunities Expansion Act May 24, which also would increase small business contracting.

His bill would immediately increase the governmentwide contracting goal for all small businesses from 23 percent to 25 percent. He said it could potentially bring companies an additional $11 billion in contracts. His bill also would raise the overall small, disadvantaged business contracting goal from 5 percent to 6 percent. It's an increase that he said could represent $5.5 billion in contracts.

Furthermore, the bill would require studies on small business federal contracting, which could potentially lead to more increases. The governmentwide goal could go as high as 27 percent, he said.

However, some wonder what the point is of increasing the targets when agencies can't meet the existing goals. In fiscal 2010 the government awarded 22.7 percent of its prime contracting dollars to small companies, compared to 21.9 percent the previous year. Agencies awarded $97.9 billion to small businesses in 2010, compared with $96.8 billion in 2009. It was a $1.1 billion increase.

The Obama administration has resisted efforts to increase the contracting goals, disagreeing with similar increases contained in the House version of the fiscal 2013 National Defense Authorization Act (H.R. 4310). The House passed the bill May 18. The Senate’s version is still under consideration.

Administration officials said the increased goals are praiseworthy, although agencies would struggle to meet them.

The increase “would establish a laudable but overly ambitious governmentwide small business procurement goal and unrealistic individual agency goals that could undermine the goals process and take away the government’s ability to focus its efforts where opportunities for small business contractors are greatest,” officials wrote May 15 in a policy statement about the defense bill.

Cardin’s bill has been sent to the Small Business and Entrepreneurship Committee for further review.

About the Author

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

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Reader comments

Wed, May 30, 2012 SDVO/HUBZone Business Owner

The previous Director of Small Business for the Air Force had a slogan "Beyond the Goals". The idea was to not get hung up on the percentages but look at and leverage the capabilities, creativity, and agility of small businesses. At first I wasn't a fan of his thinking, I liked the idea of using the goals, or more accurately the fact that so many agencies were falling short of their goals, as a way to at least get some consideration. Right now I'm ready to totally abandon DoD because their acquisition model is so broken! The ridiculousness of the mandatory use requirements for contracts like NETCENTS and ITES when these multi-year, multi-billion dollar contracts are awarded based on loosely defined requirements against which bidders price end of sale, non-standard products are an embarrassment of the contracting organizations making these awards. At least GSA BPAs established a temporary lowering of the bar (but never enough to offset the fee structures put in place by the contracting offices that established them), NETCENTS and ITES haven't even done that. I think 8 of the original 9 NETCENTS-2 Product awardees were small businesses. That sounds great until you consider the fact that use of the contract will be mandatory. The Air Force should be able to crush their small business goals but please look "Beyond the Goals". Is this in the best interest of the economy, the small business programs, the US Air Force, and the US Tax Payer? I haven't found anybody that says yes! So the Air Force has spent thousands of hours and millions of dollars getting to this point, that is no justification for continuing down the wrong path. Please stop the bleeding!

Fri, May 25, 2012 OccupyIT

I think raising the limits makes sense. The USG is based on a 'what can we get away with' approach to targets so while they won't bother to hit the existing goals if no one gets fired for missing them they don't want to be TOO far from them as this would get them in trouble. If you raise the target by 2% the agencies are likely to find 1.5% in new work for SBs. Don't think rational, think child rational.

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