Bill aims to close small biz contract loopholes

Thursday - 9/22/2011, 1:30pm EDT

By Jolie Lee
Federal News Radio

A bill in the Senate calls for the Small Business Administration to develop a new classification system to close loopholes that allow large companies to win small business contracts.

The proposal by Sen. Claire McCaskill (D-Mo.) would establish no more than 20 industries as categories and size standards based on the current Economic Census. SBA currently defines size standards for more than 1,200 industries.

McCaskill outlined a couple examples of the current loopholes. In one instance, a company that was the subsidiary of a larger company won small business set-aside contracts. In another, a company that fell under a small business classification when it won the contract later grew so much that it would no longer qualified for a small business contract.

"It's really about holding the federal government accountable to small businesses in this country. This is about cleaning up a process that doesn't work in this area," McCaskill said in a statement.