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House Clears Legislation to Reform Federal Contracting Programs

On October 30, the House passed, 334-80, the Small Business Contracting Program Improvements Act (H.R. 3867), legislation to improve federal procurement opportunities for businesses under the Small Business Administration’s (SBA) programs for 8(a), women-owned, HUBZones (historically underutilized business zones), and service disabled veteran-owned businesses. The House Small Business Committee approved H.R. 3867 on October 18 (see The Source, 10/19/07).

Sponsored by Rep. Nydia Velázquez (D-NY), the measure contains a provision requiring the immediate implementation of the Women’s Procurement Program. Enacted as part of the Equity in Contracting for Women Act of 2000 (P.L. 106-554), the Women’s Procurement Program was designed to increase the number of women-owned small businesses in the federal marketplace by allowing for restricted competition for federal contracts by women-owned businesses (WOBs) in industries in which they historically have been underrepresented. In order to identify these industries, the Women’s Procurement Program required the SBA to conduct a study. In 2005, the U.S. District Court in the District of Columbia found that the SBA had failed to act “within a reasonable time” in completing its study and ordered the SBA to move forward with the program. However, to date, the Women’s Procurement Program has not been implemented.

In response to the delay in executing the Women’s Procurement Program, the committee report states that H.R. 3867 would permit federal agencies to “act immediately at their discretion to enter into contracts with women-owned businesses,” instead of waiting for the SBA to implement the program. The bill also would “provide parameters for requiring the SBA to evaluate industry underrepresentation to ensure that the program will be implemented upon the legislation’s enactment.”

During consideration of the bill, the House adopted, by voice vote, an amendment by Rep. Velázquez that would give priority to businesses owned by severely disabled veterans; ensure the integrity of small businesses by requiring background checks of their owners and officers; and designate, until the SBA completes its identification, the following industries as “underrepresented by women in federal contracting: forestry; mining; utilities; construction; manufacturing; wholesale trade; retail trade; transportation; information; finance and insurance; real estate and rental and leasing; professional, scientific, and technical services; administrative and support, waste management, and remediation services; education services; health care and social services; arts, entertainment, and recreation; and accommodation and food services.”

Rep. Yvette Clarke (D-NY) said, “H.R. 3867 requires the Small Business Administration to implement immediately the Women’s Procurement Program after seven years of no action by the administration to put the program [into] action. It will allow agencies to limit competition for federal contracts only to women business owners in industries that have been closed to them. This legislation now requires SBA to evaluate industries where women entrepreneurs are economically disadvantaged and gives the SBA authority to waive any restrictions where women-owned enterprises are substantially underrepresented. I believe this bill will finally correct the imbalance in the number of women-owned businesses nationally when compared to their presence in the federal marketplace.”

In expressing his opposition to the bill, Rep. Steve Chabot (R-OH) said, “I certainly understand the frustration that members of Congress have when the executive branch does not implement legislation in a timely manner. Nevertheless, one aspect of this bill involves a program [the Women’s Procurement Program] that has not been implemented for seven years. While that normally would suggest further legislative action, the [Small Business] Administrator, we believe, is doing everything possible at this point to issue rules, a process that can take time.” He added, “I also would point out that the bill as reported out of committee, in our opinion, would only complicate the implementation of the procurement program. While I understand that the chairwoman will be offering an amendment to correct that problem, it [would do] so by classifying 92 percent of the industries in the United States as historically underrepresented by women businesses and federal procurement. While I concur that women are historically underrepresented in the federal procurement arena, the amendment paints…with a broad, over-inclusive brush, and may include numerous industries in which businesses are not underrepresented by women entrepreneurs.”

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