Bloomberg News

Higher Goal for U.S. Small-Company Awards Pushed by Chairman (1)

February 25, 2014

The chairman of the U.S. House Small Business Committee is proposing to increase, to 25 percent, the goal for awards of eligible federal contracts to small companies.

For at least seven years, agencies have missed the current target of 23 percent of eligible prime, or direct, contracts to small businesses. Representative Sam Graves, the Missouri Republican who leads the House panel, said in a statement that he’s introducing the legislation tomorrow.

The measure would “make it easier for small businesses to enter this marketplace and compete for contracts,” Graves said in the statement. “Small businesses have proven that they can do quality work cheaper and often faster.”

The lawmaker said he will propose a separate measure to improve data on how often federal agencies consolidate a number of contracts into one large contract, which can make it tougher for small companies to win an award.

Small businesses are generally defined as those with $7 million or less in annual revenue or fewer than 500 employees.

The legislation “provides a tremendous opportunity for small businesses to grow in the federal sector,” Cris Young, president of the Washington-based National Association of Small Business Contractors, said in a phone interview. “Today fewer and fewer firms are winning contracting dollars and we don’t feel that is healthy for taxpayers or small businesses.”

Procurement Scorecard

Federal agencies have missed the mark for at least seven consecutive years, according to the Small Business Administration’s annual procurement scorecard. Small companies received $89.9 billion, or 22.25 percent of contracts deemed eligible for small businesses, in the fiscal year that ended Sept. 30, 2012, according to federal data published in July.

It doesn’t make sense to increase the small business spending targets until agencies can meet current goals or are punished for failing to do so, said Mark Amtower, a partner at Amtower & Co., a government contracting consulting firm in Clarksville, Maryland.

“Why raise the bar when you’ve got very few agencies making the existing target?” Amtower said in a phone interview. He said the government has given “a tremendous amount of lip service about what they’re doing to help small business contracting.”

The government has fallen short of the goal during Republican and Democratic administrations. President Barack Obama’s Office of Management and Budget told agencies in a February 2011 memo that missing the target deprives taxpayers and “takes away opportunities for small businesses to create jobs and drive the economy forward.”

To contact the reporter on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net; Stephanie Stoughton at sstoughton@bloomberg.net


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