Should the small-biz contracting goal be raised?

U.S. Capitol at Night with Trees

The House version of the National Defense Authorization Act would increase the goal for small business contracting. The Senate's version contains no such provision.

Some small-business experts foresee little benefit to a potential increase in the annual small-business set-aside percentage goal because, they note, agencies can’t meet the existing target.

The House’s version of the National Defense Authorization Act (NDAA) for fiscal 2013 includes a provision that would boost the goal for small-business contracting from 23 percent to 25 percent of all contracting dollars. The Senate’s version of the bill does not include that provision. The chambers passed separate bills and are expected to begin deliberations to resolve the differences this week.

Even if the higher goal makes it into the final bill, it would not do much to help small companies, said Guy Timberlake, co-founder and chief visionary officer at the American Small Business Coalition.

“Having the small-business provisions in the House NDAA is an indicator of potential progress but in and of itself offers no value to small business,” he said. “Even if included in the version of the NDAA that passes, I’m skeptical of the actual benefits small federal contractors will realize.”

Steven Koprince, a government contracts attorney and author of “The Small-Business Guide to Government Contracts” blog, said the idea of increasing the goal has been discussed for a while and has met with mixed reactions from the small-business community.

“My personal belief is that adopting a 25 percent goal may not do much good when the government has been unable to meet the current 23 percent goal,” he said.

Small businesses received $97.9 billion in fiscal 2010, equating to 22.7 percent of contracting dollars. However, those numbers went down in fiscal 2011, when small businesses received $91.5 billion in prime contracts, or 21.65 percent of federal contracting dollars.

Koprince said officials should find ways to encourage agencies to satisfy the current requirement “before moving the goalposts.”

Rep. Sam Graves (R-Mo.), chairman of the House Small Business Committee, said earlier this year that the House’s bill would help small businesses while making it easier for agencies to crack down on firms that try to get set-aside contracts for which they are not eligible. It would also address the top complaint he hears from small contractors: When agencies bundle small contracts into one large contract, they knock small firms out of the competition.

Scott Denniston, executive director of the National Veteran Small Business Coalition and president of the Scott Group of Virginia, shares Timberlake and Koprince’s view of the proposed goal increase.

“I don’t think it will make a big difference,” said Denniston, former director of the Department of Veterans Affairs’ Office of Small and Disadvantaged Business Utilization.

The House bill includes a provision for evaluating senior agency acquisition executives on their efforts to reach the percentage goal and would strengthen the role of small-business advocates and procurement center representatives during the earliest rounds of contract deliberations.

A senior staff member of the House Small Business Committee said many industry groups are pleased about the potential 2 percent goal increase, but the other provisions are necessary to ensure its success.

Koprince said that ideally, he would like to see the percentage increase help the community. “If the requirement is adopted, I hope to be proven wrong and to see small-business contracting increase as a result,” he said.

About the Author

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


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