HOME

While government is succeeding at meeting its 23 percent goal for small business contracting, it’s still falling short of other goals for steering more work to small companies.Further policy changes will be needed to ensure that some types of small vendors get their share of federal business, according to government officials and experts.

The government has never met its statutory goals, set in the 1990s, for contracting with small companies that are owned by women or disabled veterans or located in poor areas. But some agencies are trying to do better.

The Labor Department, for one, is giving its contracting staffs more training in locating small businesses owned by underrepresented groups such as disabled veterans. It’s also reaching out to small companies at trade fairs and procurement seminars throughout the country.
“Many times it’s very difficult for the small business community out there in the country to get inside the system here in Washington, for whatever reason, so we basically bring government to them,” said Joe Lira, the department’s director of small business programs.

The Labor Department is one agency that sailed past the 23 percent overall goal: It gave 34 percent of its contract dollars to small companies in 2005. But, like many agencies, it’s still struggling to meet the goals set for various subgroups of small business.

Contract awards have increased to companies owned by disabled veterans and women, and to so-called HUBZone companies, which are located in underdeveloped areas. But they haven’t increased enough. Women-owned small businesses won 3 percent of contract dollars in 2004, but the goal was 5 percent. HUBZone companies won 1.6 percent of contract dollars and disabled veteran-owned firms won 0.4 percent, well short of the 3 percent goals for each.

Formal set-aside programs set up in recent years to force compliance with small business goals have been slow to take effect. “It’s often tough to carry out the programs for HUBZone and disabled veteran-owned companies because administrative details, such as which companies fit those profiles, are still being worked out,” said Fritz Trakowski, senior manager for contracts and procurement at Labor’s small business office.

The set-aside for disabled veterans was enacted in 2004. Meanwhile, a set-aside program for women-owned businesses enacted in 2000 is on hold while the Small Business Administration studies it to make sure it can survive lawsuits. Ironically, the delay prompted a lawsuit by the U.S. Women’s Chamber of Commerce, which says SBA is dragging its feet.

Another problem is reconciling the confusing rule differences among the small business programs, according to the Acquisition Advisory Panel, set up by Congress to recommend changes to the procurement system. “In a time when the federal work force is shrinking, but federal spending is increasing, agency officials do not have the time to rummage though various statutory sections and a multitude of implementing regulations to decode the use of the SBA’s small business programs,” members wrote in a draft report in February 2006. The contracting community needs better guidance in deciding which preference is applicable to an acquisition.

Labor officials have more ideas. “The government could require contracting officials to seek bids from three small firms, if possible, when buying through pre-awarded General Services Administration contracts,” Trakowski said. Labor already requires that, in a reflection of the rule that agencies set aside certain procurements for small companies when at least two can compete for an award.

The department also trains its officials on contractor registries and online GSA directories that can help them locate small firms. SBA could make other changes, such as altering business size standards that can force small information technology companies to compete against giants such as Lockheed Martin, said Valerie Perlowitz, president and chief executive officer of Reliable Integration Services in Vienna (VA) and small business subcommittee chairwoman at the Information Technology Association of America. The small business standard for IT companies needs to be raised from $23 million in annual revenues to $50 million annually or 500 employees, she said. Other government procurement trends could affect small firms’ ability to make themselves heard.
More government business is being conducted through multiple-award contracts, in which several companies win a contract but then compete for individual tasks ordered by the government.

Agencies try to include small companies in those contracts, but the cost of bidding is prohibitive, said Ray Bjorklund, senior vice president and chief knowledge officer at the market research firm Federal Sources Inc. in McLean, Va. Also, small companies may be shut out of contests for task orders because they lack the staff, money and time to promote their abilities. “They don’t have the infrastructure to go out there and constantly market themselves,” he said.

Posted on August 18th, 2007 by jill
Filed under: Employment & Training