WASHINGTON - North Carolina small firms might be able to obtainadditional federal business if lawmakers change the rules surrounding thegovernment's process of awarding contracts.

Thosebusinesses have been struggling to win the lucrative contracts, in part becauseofficials tend to give them to firms that have long-term relationships with thefederal government. That is why HouseSmall Business Committee Chairman Steve Chabot, R-Ohio, wants totweak the rules that govern the Small Business Administration. Chabot hascrafted legislation, known as the DefendingAmerica's Small Contractors Act of 2016, to make those changes.

▪ Thelegislation would make it easier for small-business advocates to reviewcontracts and delivery orders set aside for fledgling companies.

▪ Itwould improve the process by which those companies are educated onsmall-business rules.

Largementor firms would be barred from having relationships with smaller firmsbefore pairing up with them in a mentor-protégé program.

F.O.C.U.S. Resources PresidentLea Strickland, who advises small businesses – and even a few fledgling defensecontractors – on how to navigate contracting issues, says the new congressionalsupport is welcome but falls short of addressing some of the bigger problems.

Morethan anything, those contractors need the federal government to provide themwith clear statements on contract requirements and time commitments, she said.Small businesses that pursue federal contracts experience difficulty competingfor them due to that lax guidance, Strickland said.

"It'seven more critical to a small business, because they have less opportunity toabsorb any timing differences and financing differences," she said.

Thegovernment should also consider offering advance payments to those contractorsso that they can pay up front for inventory and staffing increases, she said.

Smallbusiness contract actions plummeted almost 60 percent from fiscal years 2011 to2014, according to a July25 congressional report. Additionally, the number of companiesregistered to perform contract services has dropped by over 100,000 since 2012,Rep. Alma Adams, D-Charlotte, said in an email.

Someof that attrition may be due to the fact that some firms do not know how toapply for federal contracts or navigate the federal contract process, Adamssaid. Regulations surrounding that process can sometimes be overly complicatedand inconsistent, she said.

The percentage of contractdollars awarded to small businesses at DoD increased from just over 16 percentto just over 19 percent, but the actual dollars only fluctuated by about 10percent. The number of small business contract actions at DoD fell by almost 70percent, and the value of those contract actions rose by nearly 290 percent.July25 congressional report

"Ithink there are many reasons (for that trend), including perhaps of a lack ofknowledge or understanding on where and how to apply for federal contracts,"she said.

Adamsis theonly North Carolina lawmaker with a seat on the House Small BusinessCommittee.

Fightingfor and winning a Defense Department contract is particularly difficult forfledgling firms. At the Defense Department, the percentage of contract dollarsawarded to small businesses has plummeted by almost 70 percent, while the valueof those contracts has spiked about 290 percent.

Someof those contracts are being scooped up by large companies that have boughtsmall companies.

"We'vefound that there have been reports of instances where federal contracting dollarswere being awarded to a large business, but counted towards federal smallbusiness contracting goals," Adams said.

H.R. 4341 fixes this issueby including a reporting mechanism requirement for the SBA to report the valueof contracts credited to each goal if the contract is being performed by acompany that is no longer small or no longer qualifies for the procurementprogram. Rep. Alma Adams, D-Charlotte

National Small Business Association spokeswomanMolly Day said it was a natural part of the cycle for businesses to grow and besold off.

"Idon't think always you know some nefarious large corporation is doing it tofleece the federal contractors into getting small business contracts," she said.

TheAmerican Small Business League seesthings differently. Small businesses have been fighting an uphill battle fordecades and have received little help from lawmakers who have accepteddonations from big companies, said league President Lloyd Chapman. Hequestioned Chabot's effort to improve conditions for small businesses.

"TheHouse Small Business Committee hasn't done anything good for small business in30 years," he said.

Whether it is waivingupfront fees for veterans who want to become entrepreneurs or helping smallcompanies ravaged by natural disasters get back on their feet, members of thiscommittee will continue to work in a bipartisan manner to help the owners,employees and patrons of America's 28 million small businesses to prosper andthrive. House Small Business Committee spokesman Joe Sangiorgio

TheAmerican Small Business League has filed multiple lawsuits on behalf of smallcompanies. This year, its members sued Small Business AdministrationAdministrator Maria Contreras-Sweet, accusing her of using "creativeaccounting" to compile its annual reports. Each federal agency is required tosend a report to the administrator at the end of every fiscal year thatexplains why that agency was able to achieve its small-business goals or why itwasn't.

Thelawsuit accuses the administration of failing to ensure that the required 23percent of the lead contract awards went to small businesses from 2006 to 2012.

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Thejoint proposal from the Department of Defense, the General ServicesAdministration (GSA) and NASA requires agencies to write a report when theychoose not to buy supplies or services through existing governmentcontracts. 

In the report, the contracting officermust compare the price of the goods or services selected with the pricesoffered through the Federal Strategic Sourcing Initiative (FSSI), a program thegovernment created to streamline government purchases.

But small businesses say that whatappears to be a simple administrative change could dismantle the Small BusinessAct.

"I've worked in government contractingfor years, and to say to do something you will have to write a separatejustification that someone has to sign off on ­­— no one is going to take thatavenue," said Belinda Guadarrama, president and CEO of GC Micro, aCalifornia-based software management company with 40 employees. "Everyone isgoing to buy off FSSI contracts. These are not small businesses."

Guadarrama and small-businessadvocates point to the section of the law that says federal agencies should "tothe maximum extent practicable, avoid unnecessary and unjustified bundling ofcontract requirements that preclude small business participation in procurementsas prime contractors."

Charles Tiefer — a professor at theUniversity of Baltimore School of Law and former member of the federalCommission on Wartime Contracting in Iraq and Afghanistan — wrote a legalopinion calling the proposed changes "blatant and undeniably illegal."

"The proposed regulations would reducethe breadth of small business contracting by up to 80 percent or even90 percent in lines of business where small business contracting iscurrently common," he wrote.

In it's proposed rule, the governmentsays the changes are needed to implement a statute that requires documentingwhen an agency determines not to use an FSSI contract.

But in an interview with The Hill,Tiefer argued the government could have fulfilled that statutoryrequirement in other ways.

"There was a bare-bones, two-sentenceprovision in one of the recent defense authorization bills," he said. "It'stotally bare bones. So how you implement it is left entirely, entirely —completely, totally and entirely — up to the agencies."

Instead, Tiefer said, the governmentchose to push small businesses out of the running. Though it's possible forsmall businesses to become FSSI contract holders, Tiefer said it isn't easy.

"It's as difficult for me to fly downto Rio and join the Olympics," he said. "Sometimes the requirements arepractically nationwide."

Take a contract for custodialcare services for federal offices from coast to coast for example. While asmall 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 tobe able to do the work required.

Lloyd Chapman, president of theAmerican Small Business League, said he's already preparing to challenge therule change in court. 

"I would describe them asanti-small-business, job killing and illegal, and we don't need that in Americaright now," he said. "We don't need policies that are going to kill jobs andpull money from the middle class."

The GSA said it does not speak onbehalf of the Federal Acquisition Regulatory Council, the multi-agencyrulemaking body behind these policy changes, and directed The Hill to the WhiteHouse Office of Management and Budget's (OMB) Office of Federal ProcurementPolicy. 

On Tuesday, the OMB said it would haveto look into the matter. It did not respond by TheHill's Wednesday afternoon deadline. The Defense Department also didnot respond to a request for comment.

In its proposal, the government saidthe rule will not directly affect "small entities" and could benefit smallbusinesses that have an existing FSSI contract with the government by forcingcontracting officers to look at FSSI contracts they might not have lookedat in the past.

Of the 137 entities with FSSIcontracts, the government said 78 are classified as small entities.

The public has until Friday to submitcomments 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

PETALUMA – The Pentagon has filed an appeal in the 9thCircuit Court of Appeals in the Freedom of Information case against itregarding the Comprehensive Subcontracting Plan Test Program (CSPTP).

The lawsuit was initially filed by the American SmallBusiness League (ASBL) and won in 2014, seeking the subcontracting plansubmitted by Sikorsky Aviation Corp. for the CSPTP. ASBL claims the Pentagongives preference to large contractors through its CSPTP.

"Our goal is to force the Pentagon to release the reportsthat have been submitted to the CSPTP," Lloyd Chapman, president and founder ofASBL told the Northern California Record. "We believe these reports willprove the Pentagon has allowed their largest prime contractors to cheat smallbusinesses out of hundreds of billions in federal subcontracts since theprogram began in 1989. In doing so we hope we can convince Congress to abolishthe program. The fact the Pentagon has refused to release even a single page ofdata on the program for over 25 years is clear evidence they are trying to hidethe fraud and corruption we believe the program has allowed."

In their appeals, the Pentagon and Sikorsky are fightingthe motion to release names, phone numbers and email addresses of the employeesof Sikorsky that are contained in the subcontracting plan, maintaining theinformation is proprietary and confidential. Federal District Court JudgeWilliam Alsup had ruled that the information bereleased.

"If we can dismantle the CSPTP, the Pentagon and itsprime contractors will finally be forced to comply with federal law andlegitimate small businesses will begin to receive billions in federalsubcontracts as the law requires," said Chapman. "It is hard to estimate, but Iwould estimate small businesses could see an increase of up to $100 billion ayear in subcontract. That number may sound large, but federal law requires a 37percent small business subcontracting goal and Lockheed Martin alone receivedaround $100 billion in federal prime contracts last year. That could be up to$37 billion in subcontracts just from Lockheed and there are about 15 of thePentagon's largest prime contractors participating in the CSPTP."

The ASBL is asking for more transparency from the Pentagon,which it believes the CSPTP is designed to prevent.

"More transparency means less fraud and more compliancewith the law," said Chapman. "Why do you think the Pentagon wants notransparency on small business subcontracting? They want to be able to violatethe law and not be held accountable for it."

ASBL expects a strong outcome from the suit as itbelieves the program is cheating small business out of contracts with federalgovernment.

"Iexpect we will win, the Pentagon will be forced to release all the reportsgoing back several years and it will prove the Pentagon and many of its largestprime contractors have committed fraud in the reporting of federal smallbusiness subcontracting data," said Chapman. "I suspect the data will prompt acongressional hearing and possibly a criminal investigation."

Toview full article, click here: http://norcalrecord.com/stories/510991517-pentagon-files-appeal-not-to-release-information-in-subcontracting-plan