joint proposal from the Department of Defense, the General Services
Administration (GSA) and NASA requires agencies to write a report when they
choose not to buy supplies or services through existing government
In the report, the contracting officer
must compare the price of the goods or services selected with the prices
offered through the Federal Strategic Sourcing Initiative (FSSI), a program the
government created to streamline government purchases.
But small businesses say that what
appears to be a simple administrative change could dismantle the Small Business
“I’ve worked in government contracting
for years, and to say to do something you will have to write a separate
justification that someone has to sign off on — no one is going to take that
avenue,” said Belinda Guadarrama, president and CEO of GC Micro, a
California-based software management company with 40 employees. “Everyone is
going to buy off FSSI contracts. These are not small businesses.”
Guadarrama and small-business
advocates point to the section of the law that says federal agencies should “to
the maximum extent practicable, avoid unnecessary and unjustified bundling of
contract requirements that preclude small business participation in procurements
as prime contractors.”
Charles Tiefer — a professor at the
University of Baltimore School of Law and former member of the federal
Commission on Wartime Contracting in Iraq and Afghanistan — wrote a legal
opinion calling the proposed changes “blatant and undeniably illegal.”
“The proposed regulations would reduce
the breadth of small business contracting by up to 80 percent or even
90 percent in lines of business where small business contracting is
currently common,” he wrote.
In it’s proposed rule, the government
says the changes are needed to implement a statute that requires documenting
when an agency determines not to use an FSSI contract.
But in an interview with The Hill,
Tiefer argued the government could have fulfilled that statutory
requirement in other ways.
“There was a bare-bones, two-sentence
provision in one of the recent defense authorization bills,” he said. “It’s
totally bare bones. So how you implement it is left entirely, entirely —
completely, totally and entirely — up to the agencies.”
Instead, Tiefer said, the government
chose to push small businesses out of the running. Though it’s possible for
small businesses to become FSSI contract holders, Tiefer said it isn’t easy.
“It’s as difficult for me to fly down
to Rio and join the Olympics,” he said. “Sometimes the requirements are
Take a contract for custodial
care services for federal offices from coast to coast for example. While a
small business could provide the services for the area in which they’re located,
Tiefer said they’d have to create a team of contractors across the country to
be able to do the work required.
Lloyd Chapman, president of the
American Small Business League, said he’s already preparing to challenge the
rule change in court.
“I would describe them as
anti-small-business, job killing and illegal, and we don’t need that in America
right now,” he said. “We don’t need policies that are going to kill jobs and
pull money from the middle class.”
The GSA said it does not speak on
behalf of the Federal Acquisition Regulatory Council, the multi-agency
rulemaking body behind these policy changes, and directed The Hill to the White
House Office of Management and Budget’s (OMB) Office of Federal Procurement
On Tuesday, the OMB said it would have
to look into the matter. It did not respond by The
Hill’s Wednesday afternoon deadline. The Defense Department also did
not respond to a request for comment.
In its proposal, the government said
the rule will not directly affect “small entities” and could benefit small
businesses that have an existing FSSI contract with the government by forcing
contracting officers to look at FSSI contracts they might not have looked
at in the past.
Of the 137 entities with FSSI
contracts, the government said 78 are classified as small entities.
The public has until Friday to submit
comments on the proposed rule.
To view full article, click here: http://thehill.com/regulation/business/291722-small-businesses-fear-rule-changes-will-crater-federal-contract-chances