While our current Congress is often criticized for not getting a lot done in Washington, they recently approved an umbrella bill (H.R. 1481) that could lead to many positives for our government contracting clients. There appears to be both a lack of information and hurdles that small contractors have within this current environment. As a result, Congress passed the Small Contractors Improve Competition Act in late March 2015. This bill focused on two main provisions. First, larger agencies will be forced to forego practices that have long been seen as “freezing out” smaller contractors. Second, the Government Accountability Office (GAO) will create a new study that focuses on the goals of small contractors.
Rep. Steve Chabot (R-OH) is the chairman of the House Committee on Small Business and has been extremely influential in getting this bill passed. Chabot said, “We know that when small businesses compete for federal work, it creates jobs, improves the quality of work, and saves taxpayer money. This bill is a common-sense approach to make sure that Washington is working with Main Street – not locking it out of the procurement process altogether.” Chabot also summarized the importance of getting this bill passed because there has been a major drop-off in the number of small contractors winning federal contracts, resulting in raised government costs. Currently, there are 100,000 fewer companies competing for contracts, and the number of contracts won by small business has decreased by almost 60%. In addition to the number of contracts decreasing, the average size of a contract action has increased 230%.
As mentioned above, the bill serves two purposes. Larger contractors who are able to provide more services will no longer be able to “bundle” their offerings for separate contracts to achieve a better overall bid. Separate contracts will have to receive separate bids allowing smaller contractors who specialize in certain areas of expertise a better chance of winning that specific contract. Also, it seems that there is a real lack of quality information for small businesses on the prime and subcontracting service levels. Alan Chvotkin, who is Executive Vice President of the Professional Services Council said, “This bill will help address some of these concerns (lack of quality data) by raising the profile of subcontracting opportunities and data collection.” The passing of this bill should be great news to many of our clients as they fall into the small contractor category. The ability to pursue contracts that fit along with their specialized offering as well as making sure there the government is awarding enough contacts to small business is definitely great news for all.