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There is no question that the current environment in the federal
market for small businesses is challenging, to say the least. However, the
environment for small business may soon need to be declared a full on disaster
zone.
Two recent developments are moving
forward to continue making being a prime contractor and a small business more
difficult, if not impossible.
First is the recent decision by a federal judge to
rule against the small business community. One of the leading voices fighting
for small business federal government contractors is Lloyd Chapman, President
of the American Small Business League
(ASBL). Mr. Chapman had hoped to bring to light the state of the small business
federal government contracting market, and the way that small businesses get cheated
out of billions of dollars in potential contracts.
In the wake of the decision, Mr. Chapman stated:
"This case would uncover
billions in fraud in federal small business contracting programs. If the
Federal courts cannot stop fraud in federal small contracting, where do you
go?"
According to a Government Accountability
Office report, the Small Business Administration had included billions of
dollars in federal small business contracts to over 5,300 Fortune 500 firms and
other large businesses. Therefore, the government's compliance
with the goal of awarding 23% of government contracts to small business
continues to be in question.
Even government contract experts agree that the small
business community is seeing a large share of lost contracting opportunities:
Professor Charles Tiefer, one of the nation's leading
experts in federal contracting law and former Commissioner of Wartime
Contracting in Iraq and Afghanistan, submitted a declaration in
support of the ASBL case. "If the lawsuit had been allowed to get its
rightful day in court on the merits, the lawsuit would have required the SBA to
give all small businesses -- and doubly so for minority, women-owned,
and disabled veteran businesses -- a larger and proper share of federal
procurement."
The ASBL plans to appeal the ruling to the
9th Circuit Court of Appeals.
Second, and more pernicious, is the unthinkable
actions by Congress, who are supposed to be fixing this problem.
With no surprises behind the impetus, Section 838 of the 2017
National Defense Authorization Act, Counting of major defense
acquisition program subcontracts toward small business goals, is
nothing short of a small business killer.
The impact would be catastrophic on the small
business community, since the Pentagon spends the most. This provision allows
the Department of Defense to count first tier and second tier
subcontract dollars towards the current goal established
for competitive and noncompetitive set-aside awards to small business.
Subcontract dollars would therefore replace dollars
being awarded to small contractors today.
To see the potential impact, and the potential
disaster awaiting small businesses, Guy Timberlake, the Chief Visionary Officer
of the American Small Business Coalition, has an excellent analysis on the
situation.
In three separate events in Washington D.C. this week
where this issue was mentioned, all three representatives of the small business
office for agencies at the individual events were excited at the prospect. They
falsely believe this will help meet their numbers, but correctly believe this
will be much less work for them. It was clear where the priorities are for
these, and other, small business offices across federal government.
All small businesses should be up in arms over these
developments, as the powers that be are aligned to punch down and cheat small
businesses out of billions of dollars in federal contracts. Small businesses
need to be aware of what is happening, and contact their members of Congress.
If this gets adopted across the federal government,
small business government contracting can be a thing of the past.
