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

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: