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House Subcommittee Examines Barriers to Federal Contracting

On April 16, the House Small Business Subcommittee on Contracting and Technology held a hearing, “Ensuring Small Businesses Have Fair Access to Federal Contracts.” 

Chair Bruce Braley (D-IA) said, “In March of last year, this subcommittee held a hearing on the delayed implementation of the Women’s Procurement Program. At the time, I was less than three months into my tenure in Congress and I was shocked by the utter disregard of the administration for the important role women entrepreneurs play in our economy. Incredibly, SBA continues to drag its feet on the implementation of this important initiative. In January, the agency even issued a regulation that was completely unworkable. That was just the latest in a series of contracting decisions that run clearly counter to the intent of the current law.” 

Ranking Member David Davis (R-TN) said, “The SBA [Small Business Administration] has overall done a good job in implementing the congressional direction in the Small Business Act [P.L. 85-536] and specifically the contracting programs. The SBA, as this committee does, should continually assess the effectiveness of existing federal contracting programs and recommend any changes and/or improvements. They should also review and recommend inherent synergies that would benefit all small businesses.” 

Fay Ott, associate administrator of General Contracting and Business Development at the Small Business Administration, said, “SBA has made significant strides to improve small business access to federal contracts. From FY2000 to FY2006, federal government prime contracting dollars going to small businesses have grown by 54 percent, from $50 billion to $77 billion…Looking forward, SBA recognizes the need to improve small business government contracting programs, both within SBA and externally by working with other executive agencies. We have worked to provide data that more accurately measures agency results, and we have continued to improve SBA’s Scorecard so that it more clearly measures agency progress toward small business goals. We are addressing a long-standing problem over the size standards across the range of business categories. Finally, we are working to ensure that small businesses have the best possible access to federal contracting opportunities by augmenting and providing better direction to the personnel who work directly with small businesses.” 

“If ever there was a time for the federal government to finally fulfill its promise to women to assure fair access to federal contracts, the period between 1999 and 2006 was the time,” said Margot Dorfman, chief executive officer of the U.S. Women’s Chamber of Commerce. She continued, “Instead, as the total number of women-owned businesses in America grew at a record-breaking rate and federal spending grew dramatically, our relative share of federal contracting participation continued to grow at a snail’s pace.” 

Ms. Dorfman described some of the barriers to women-owned businesses accessing federal contracts. Citing one example, she said, “Over recent years, the SBA has failed to make certain that even the most significant contract actions and contractors are accurately attributed as women-owned firms. As contracts are awarded, contract actions are recorded in the Federal Procurement Data System (FPDS). This data is used by the SBA to create annual goaling reports that provide us with information on federal purchasing, such as total contract actions and total dollars spent. Using data from the FPDS (which is now readily available to the public through the new government transparency website…), one can easily generate a report listing the largest contractors to which ‘women-owned small business’ actions have been attributed. In 2006, the top 100 contractors with actions flagged as ‘women-owned’ represented over $5 billion of the total $11.6 billion that the SBA claims was spent with women-owned small businesses. By simply making a careful analysis of these top 100 contractors, the SBA could go a long way towards assuring the accuracy of their own reporting.” 

She added, “Unfortunately, it is clear that the SBA did not carefully peruse even these largest contractors and take action to assure that the FPDS accurately reflect the women-owned business status of these companies. With just a cursory look through the list of firms and associated transactions, their CCR [Central Contractor Registration] registrations, their ‘small business’ NAICS [North American Industry Classification System] code designations, and their company websites, it is clear that this list is shockingly full of businesses that are either not small, not authenticated as ‘women-owned’ in CCR, or clearly should not qualify as women-owned, as their company’s CEOs are not women.” 

Aundrea Wilcox, executive director of the Kingsport Office of Small Business Development and Entrepreneurship (TN); Charles Day, senior member of Charles F. Day and Associates LLC; and Chris Bates, president of the National Office Products Alliance, also testified.

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