Kerry Responds to Bush Administration's Failure to Meet Its Small-Business Contracting Goals

Sen. John Kerry [D-Mass.], chairman of the U.S. Senate Committee on Small Business and Entrepreneurship, released the following statement regarding the Bush Administration’s failure to meet its small-business contracting goal. This comes after yesterday's release of the Small Business Administration’s [SBA] annual contracting Scorecard, which shows that just 17 of 24 federal agencies met their 2007 small-business contracting goal:

"For the second year in a row, the Bush Administration has short-changed America's small businesses. But the fact that the government missed its contracting goal isn't even the worst of it. Like the administration itself, the numbers just can't be trusted. They don't count the millions of small-business contracts that have slipped through the cracks and gone to corporate giants.

"Eight years of budget cuts and lax oversight show that the Bush Administration thinks small equals less important. Given the impact entrepreneurs have on our economy, we need leadership that is more aggressive in giving small businesses the chance to succeed in the federal contracting arena."

SBA’s Scorecard builds on a series of significant initiatives the agency began two years ago to improve small-business access to federal contracts. SBA, along with the Office of Federal Procurement Policy, ordered the federal contracting database to be scrubbed, removing many cases of non-profits, state or local governments, and large companies that were recorded erroneously as small businesses.

The annual Scorecard rated federal agency performance in meeting the overall small-business goal and the component contracting goals for small disadvantaged businesses, small businesses in HUBZones, and small businesses owned by women, and service-disabled veterans.

The following 17 agencies met their small-business contracting goals: the departments of Veterans Affairs, Agriculture, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, State, Transportation, Treasury, and the Environmental Protection Agency, General Services Administration, National Aeronautics and Space Administration, Nuclear Regulatory Commission, Office of Personnel Management, and SBA.

GoodBiz113's take: America's small-business owners, entrepreneurs and self-employed folks are fortunate to have Sen. Kerry advocating on our behalf, to see that we're awarded the contracts that have been set aside for us -- at least 23 percent of all federal contracts, according to Federal Acquisition Regulation [FAR] -- Part 19 standards. Hopefully, the next Administration will be much fairer in spreading the wealth of federal contracting dollars, and all 24 agencies will meet their small-business contracting goals across all components.

SOURCES: U.S. Senate Committee on Small Business and Entrepreneurship, U.S. Small Business Administration
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SBA Releases First-Ever Procurement Scorecard; Seven of 24 Federal Agencies Met 2006 Contracting Goals

In an effort to increase the transparency and accountability in small-business contracting, the U.S. Small Business Administration [SBA] today released its first-ever Small Business Procurement Scorecard. The Scorecard will help agencies measure their achievements and progress in making contracting opportunities available to small businesses, improve the accuracy of contracting data regarding small businesses, and provide the public the opportunity to assess agencies’ performance in meeting these goals.

Seven federal agencies -- the Departments of Agriculture, Energy, Homeland Security, Housing and Urban Development, Transportation, Veterans Affairs, and SBA itself -- met their small-business contracting goals.

“SBA’s and the agencies’ commitment to small-business contracting results is unprecedented,” said Clay Johnson, Deputy Director for Management at the Office of Management and Budget. “With clear, outcome-oriented goals, clear, realistically aggressive plans to achieve them, clearly defined accountability, and frequent tracking of performance, SBA and the agencies are saying they want to be held most publicly accountable for contracting with small business at desired levels.”

SBA’s Scorecard builds on a series of administration initiatives to improve small-business access to federal contracts. At the request of the White House’s Office of Federal Procurement Policy and SBA, federal agencies spent months reviewing 11 million contract actions from the last two years to cleanse the database of miscoded contracts.

On June 30, federal regulations were changed. Contracts awarded to small companies acquired by large corporations will no longer count towards federal agency small-business goals – even if the acquisition took place before the rule change.

“These changes – increased accuracy, transparency and accountability – provide a real window of opportunity for America’s small businesses,” said SBA Administrator Steven Preston [pictured]. “Almost $5 billion in misreported contracts have been cleaned out of the small-business database.

"To meet their goals in 2007 and beyond, federal agencies know they will have to place more new contracts with small businesses. SBA is also increasing its staff and technical assistance to help our federal partners meet their contracting needs.”

Small Business Goaling Report
After working with federal agencies to identify miscoding and anomalies in the contracting database, SBA released the annual Small Business Goaling Report for FY 2006, and revised the FY 2005 report.

The Goaling Report shows that $77.7 billion in federal contracts were awarded to small businesses in FY 2006 -- up $2.7 billion from the previous year. The revisions reduce the share of contracts awarded to small businesses in 2005; $4.6 billion from the previously reported 25.4 percent, to 23.4 percent. For 2006, the figure is 22.8 percent, just short of the small-business procurement goal established by law at 23 percent.

Administrator Preston cited the progress federal agencies have made towards meeting the five targeted sub-categories for small businesses procurement as an example of what can be accomplished when agencies track progress towards small-business goals. “While only the target for small disadvantaged business has been met so far,” he said, “SBA is encouraged by the real gains made in every category in 2006.”

In other categories, contracts to companies owned by service-disabled veterans increased by 50 percent, from $2 billion to $3 billion; contracts to women-owned businesses increased by a billion dollars; contracts to 8(a) enterprises rose by $700 million; and contracts to HUBZone firms were up $1 billion.

“We still have more to do to reach our targets,” Preston said, “but these are accomplishments that our federal partners can be proud of.”

View From the Senate
In light of SBA's new report, Sen. John Kerry [D-Mass.], chairman of the Committee on Small Business and Entrepreneurship, expressed reserved praise.

“I’m glad to see Administrator Preston has taken some steps to fix the faulty and misleading small-business contracting numbers and hold agencies accountable, but these numbers should still be viewed with caution," Kerry declared in a formal statement. "Despite the federal contracting budget increasing by at least $20 billion last year, the percentage going to small businesses decreased, and the government still isn’t counting the whole pie because of special exemptions and exclusions.

“It’s critical that we continue to improve the reporting system and count all contracts in calculations, so we know the reality on the ground. It’s not about meeting the goals for the sake of meeting a number. Doing more business with small firms is good for our economic and national security, because it diversifies our supply base. I will continue to review and analyze these numbers, and will work with Administrator Preston to ensure that the entire government is truly meeting the small business goals.”

About the Scorecard
SBA rates 24 agencies green, yellow or red -- both on whether they reached their annual small-business contracting goals, and on their progress on efforts to make contracting opportunities available to small businesses. To achieve a green rating, a federal agency has to meet its overall small-business contracting goal, as well as the goals for at least three of four subcategories. For their current status, seven agencies were rated green, five yellow, and 12 were red. In the second category, under “progress,” 12 agencies were rated green, eight were yellow, and four were red.

Each federal agency has a different small-business contracting goal, determined annually in consultation with SBA. SBA ensures that the sum total of all of the goals exceeds the 23 percent target established by law. The Scorecard will be updated every six months and is publicly available on the SBA Web site.

Sources: U.S. Senate Committee on Small Business and Entrepreneurship, U.S. Small Business Administration
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House Opens Federal Marketplace to More Small Business Participation, Helps Fight Fraud in Contracting System

As small businesses continue to struggle to access the $340 billion federal marketplace, the House last Wednesday [May 9] passed the most comprehensive reform of the contracting system for entrepreneurs in over a decade. H.R. 1873, the Small Business Fairness in Contracting Act, which increases small business access to federal contracts, offers protections against contract bundling, and prevents large businesses from receiving small-business contracts, passed by a wide margin of 409 to 13.

"For many entrepreneurs, access to federal contracts provides an important step in developing and expanding a business," said Rep. Nydia M. Velázquez [D-N.Y.], chairwoman of the U.S. House Committee on Small Business. "Today, the House passed legislation that ensures small business owners are competing on a level playing field. This is a major, and long overdue, step forward for entrepreneurs."

Over the past several years, small businesses' federal contracting opportunities have not kept pace with the expanding federal marketplace or small firms' growing share of the economy. Small companies confront numerous obstacles when attempting to access federal contracts, as the government continues to combine work into contracts too large for entrepreneurs to bid on, making the projects less accessible to small businesses.

In the past few years, small businesses have also lost out on opportunities, as contracts intended for small businesses were awarded to large corporations. There are currently few penalties for agencies and companies that misrepresent larges businesses as small.

The combination of barriers such as these has resulted in billions of dollars in lost contracting opportunity each year for this nation's small businesses.

"Awarding federal contracts to small businesses creates jobs, develops companies, promotes competition and yields the best value for the taxpayer dollar," said Chairwoman Velázquez. "Congress acted today to guarantee that our entrepreneurs get the opportunities they deserve and to hold the federal government more accountable for how taxpayer money is spent."

H.R. 1873, introduced by freshman Rep. Bruce Braley [D-Iowa], chairman of the Subcommittee on Contracting and Technology, makes more contracts available to small firms. During consideration of the bill, several measures also passed that raise the level of federal commitment to contracting with small businesses, ensure small firms can compete for overseas contracts, strengthen requirements for agencies to review the economic impacts of large contracts, and provide greater protections for small business subcontractors. These additions enhance improvements for small firms in H.R. 1873 that will allow for greater small business participation in the federal marketplace.

"I am proud that my first bill to pass the House is one that will help small businesses compete," Congressman Braley said. "The Small Business Fairness in Contracting Act ensures that small businesses have the same opportunities as large corporations to earn government business.

"When government contracts are awarded through huge super-contracts, small businesses just can't compete on a level playing field. By forcing government agencies to be held accountable for awarding these so-called 'bundled contracts,' more small businesses will have the opportunity to benefit from earning government business. Furthermore, by providing for the enforcement of these new provisions, this bill will have the teeth to make sure government agencies are following the law. At the end of the day, this means expanded opportunities for small business."

This legislation is part of the committee's ongoing work to restructure how small businesses interact with the federal procurement system. The Small Business Fairness in Contracting Act is the first piece of legislation to address problems outlined in the committee's annual scorecard on federal contracting.

GoodBiz113's take: Little by little, it seems, our rants/wish-list items [e.g., "Welcome to GoodBiz113!" "GoodBiz113 Drafts Small-Biz Wish List for 110th Congress," "GoodBiz113 Issues Open Memo to Leaders of Congressional Small Business Committees"] are helping to attract productive results for small businesses and entrepreneurs. Hats off to U.S. House members for forcing federal agencies to do the right thing for all concerned.
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