Hoping for job growth, policymakers target small contractors with a rash of new bills


In this file photo, US President Barack Obama addresses a Joint Session of Congress on September 8, 2011, on Capitol Hill in Washington, DC. (SAUL LOEB/AFP/GETTY IMAGES)
March 9, 2012

Seeking to promote job creation, policymakers in the House and Senate have been introducing a rapid-fire succession of contracting bills that aim to help small business owners who sell to the government.

In the past few months, the House Small Business Committee has brought forward 11 bills targeted at small contractors — partly because contracting is one of the few sectors in which the committee has full jurisdiction, and partly because Committee Chair Sam Graves (R-Mo.) believes these types companies are a path to job creation.

In an e-mail statement, Graves said it’s important to help small contractors because, unlike larger firms, small companies will hire additional workers to manage new business.

“Government contracting offers a unique opportunity to invest in small businesses while also stimulating our economy, considering small businesses create the majority of jobs,” he said. “While many large companies can perform new government contract work with existing workforce, most small businesses hire more employees to handle the extra workload.”

The House committee held a hearing on six of the bills Wednesday and approved all of them — five by voice vote — in a show of rare bipartisanship in an era of partisan rancor.

Then on Thursday, Sens. Olympia Snowe (R-Maine) and Kirsten Gillibrand (D-N.Y.) introduced the Fairness in Women Contracting Act. The bill would remove the limit on the award price for contracts selected under the procurement program for women-owned small businesses. (The same bill was proposed in 2010 but never made it out of committee.) Three other Senate contracting bills have been introduced in February.

It’s unclear whether, as Graves argues, small contractors actually hire additional employees when they get new business, said Ray Bjorklund, chief knowledge officer with the government-contractor software company Deltek. (Deltek is a content partner of Capital Business, On Small Business’s parent publication.) The government usually expects contractors to hit the ground running on agency work, not to embark on a candidate search after they win a contract, he noted.

Still, contracting is becoming Congress’s preferred method of boosting small companies because contracts are both more measurable and less politically controversial than the alternatives — loans and subsidies, Bjorklund said. Solyndra and other failed clean-tech loans have made some policymakers wary about such endeavors.

It’s also harder to gauge how much a government loan or subsidy helped a small business without asking for before- and after-revenue figures, which private companies aren’t obligated to disclose. Meanwhile, contract dollars are easily tracked and measured.

“Whether or not the government is hiring small businesses — that’s something that’s very tangible for Congress to get their arms around,” Bjorklund said.

Below is a summary of the bills the House Small Business Committee approved this week and what impact they would have on small contractors if they passed:

H.R. 3850 — The GET Small Business Contracting (Government Efficiency Through Small Business Contracting) Act of 2012, sponsored by Graves and Rep. Bill Owens (D-N.Y.)

 The act would raise the small-business contracting goal from 23 to 25 percent. The new limit would mean about $11 billion worth of new business for small contractors, the House Small Business Committee estimates. It would hold top agencies accountable for meeting the small business goals by withholding the senior agency officials’ bonuses if the goals aren’t met. It also would raise the goal of awarding 40 percent of all subcontracted dollars to small businesses — an increase from the current goal of 35.9 percent.

H.R. 3851 — The Small Business Advocate Act, sponsored by Graves

The act would promote the director of the Office of Small and Disadvantaged Business Utilization (OSDBU) to a senior acquisition leader in the agency. Currently, the position is held by a senior official who lacks the authority to challenge decisions made by the chief acquisition officer or senior procurement executive.

H.R. 3893 — The Subcontracting Transparency And Reliability Act of 2012 (STAR Act), sponsored by Rep. Mick Mulvaney (R-S.C.)

Insourcing is the process in which a federal agency cuts a contract with a private-sector company and opts instead do the work internally. The act would require agencies to publish their insourcing processes and give small business contractors ability to challenge insourcing decisions in court. It also would allow for more small businesses to team with each other to compete for federal contracts.

H.R. 3980 — The Small Business Opportunity Act of 2012, sponsored by Rep. Jaime Herrera Beutler (R-Wash.) and Rep. Kurt Schrader (D-Ore.)

The Small Business Opportunity Act would provide the Offices of Small and Disadvantaged Business Utilization (OSDBUs) and Procurement Center Representatives (PCRs) with access to acquisition plans earlier in the procurement process, and require that acquisition plans address how small businesses will be used.

H.R. 4118 — The Small Business Procurement Improvement Act of 2012, sponsored by Rep. Mark Critz (D-Pa.)

The act would add the Small Business Administration to the Federal Acquisition Regulatory Council with the aim of ensuring small-business interests are considered as procurement regulations are crafted.

H.R. 4121 — The Early Stage Small Business Contracting Act of 2012, sponsored by Schrader

The act would give the smallest, early-stage small businesses the first opportunity on contracts under $75,000 if utilizing such a firm would provide the government with a fair and reasonable price. 

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