SBA turns eye on Navy

The Small Business Administration last week urged the Navy to disclose the

number of small businesses that could be cut off from future Navy business

once the service awards its $16 billion intranet contract.

The Office of the Assistant Secretary of the Navy for Research, Development

and Acquisition last week transmitted a "data call" to Navy contracting

offices requesting a list of all small businesses that hold prime contracts

with Navy units. The Navy initiated the data call after SBA expressed concern

that the Navy/Marine Corps Intranet (N/MCI) contract, slated for award in

June, may end the chances for many small businesses to sell services to

the Navy.

In an official e-mail obtained by Federal Computer Week, a Navy contracting

official explained that "the small business community is concerned about

lost opportunities to serve the government as a prime contractor resulting

from implementation of N/MCI. Therefore, SBA has requested certain information,

and [the Navy] has agreed to provide statistics on small business firms

that will be displaced by N/MCI."

The N/MCI is designed to serve 700,000 Navy and Marine Corps users.

A single contractor team from among four possible primes will win the deal

when the Navy awards the contract.

Joan Benning, procuring contracting officer for N/MCI, said the philosophy

has always been to include small businesses as major players in the contract.

Small businesses account for 35 percent of the contract, said Benning, adding

that at least 10 percent of the winning prime's top-tier team must be small

businesses.

"This is a requirement, not a goal," said Benning. She added that the

Navy has various "contractual remedies" it can call on if the prime contractor

does not abide by the small business requirement, including contract termination.

However, "for N/MCI services, there will be a singular [prime] vendor,"

conceded Benning.

The flap over small businesses has also reached Congress. In a joint

letter sent on March 10 to Secretary of the Navy Richard Danzig, Rep. Jim

Talent (R-Mo.), chairman of the House Small Business Committee, and Rep.

Roscoe Bartlett (R-Md.), chairman of the Government Programs and Oversight

Subcommittee, urged the Navy to halt N/MCI until "prudent planning" has

been completed with respect to small businesses.