OFPP, SBA trying to fix small business contracting shortcomings

Monday - 6/11/2012, 5:34pm EDT

The Office of Federal Procurement Policy is trying to address three-long standing problems with small business contracting.

Joe Jordan, the administrator of OFPP, and Karen Mills, the administrator of the Small Business Administration, sent a memo to agency leaders asking them to take specific steps to ensure more contracts go to small firms. The recommendations come from the April 25 White House Small Business Procurement Group meeting.

By July, OFPP wants details of the steps agencies are taking.

One major issue is agencies not giving small firms proper consideration for procurements under $150,000, the Simplified Acquisition Threshold (SAT).

Jordan and Mills wrote that a third-party analysis showed "that a significant amount of work under the SAT is not going to small businesses, including for products and services in industries where small businesses are typically well represented. This suggests that opportunities for small businesses are being lost, and that agencies must take additional steps to consistently apply set-asides in the manner prescribed in law and regulation."

Agencies must send all contracts that fall under $150,000 to small firms unless there is no expectation they will get offers from two or more small businesses.

"[W] e are asking that all agencies review their small business contracting practices for purchases under the SAT and make adjustments where appropriate," Jordan and Mills wrote. "At a minimum, agencies should remind their contracting components of responsibilities to set aside contracts whose value is equal to or less than the SAT unless the rule of two is not met, to properly document the contract file when a set-aside is not used, and to maintain appropriate internal controls that ensure consistent application of these requirements."

SBA soon will review each agency's contracts falling under the threshold, which were not awarded to small businesses.

"SBA expects agencies to monitor their SAT performance and take appropriate actions when missed opportunities to make contract awards to small businesses are identified," the memo stated.

Jordan and Mills also asked agencies to report back to the Office of Management and Budget the steps they are taking to review internal controls and steps they are taking to increase small businesses contracting under SAT.

Small business contracting as a percentage of total procurement spending has been flat over the last five years. Congress included in the Small Business Jobs Act of 2010 the ability for agencies to set-aside task orders for small firms under multiple-award contracts.

Jordan and Mills are asking agencies to take six steps to increase the opportunities for small companies under multiple award contracts:

  1. Issue a memo to remind contracting officers of the interim regulations to use this authority. The Federal Acquisition Regulations Council released an interim rule in November.

  2. Consider requiring set-asides under multiple award contracts if the agency is not currently meeting its small business goals.

  3. Modify existing multiple-award contracts to provide for the ability to do set-asides for task orders.

  4. Strengthen internal controls to show how the agency is implementing this law.

  5. Review SBA's May 16 proposed rule providing more specific guidance on how best to consider set-asides.

  6. Train the workforce to use the set-aside authority.

"To help agencies measure their progress, SBA will provide agencies with an analysis of their task and delivery order spending (including spending under the SAT) that has not been awarded to small businesses," the memo stated.

Finally, Jordan and Mills encouraged agencies to include small business contracting goals in the performance evaluations of all Senior Executive Service members who oversee the acquisition workforce.

Agencies have missed the governmentwide goal of 23 percent the last five years.

"As we move forward, each agency should ensure program, contracting, and small business policy staff understand their agency's small business contracting goals and the tools available for meeting their goals," the memo stated.

This story is part of the Federal News Radio week-long special report, Inside the World's Biggest Buyer.

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