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Senate follows House in taking up small business contracting bill

By Elizabeth Newell
Government Executive
November 7, 2007

Legislation aimed at expanding contracting opportunities for small businesses by updating and expanding existing programs passed the Senate Small Business Committee Wednesday.

Similar legislation passed the House last week.

The Small Business Contracting Revitalization Act (S. 2300) was drafted by Sens. John Kerry, D-Mass., and Olympia Snow, R-Maine, the chairman and ranking member of the committee. It includes provisions to unbundle contracts, enforce protections for subcontractors and expand opportunities for minority, women and service-disabled veteran owners of small businesses. Many of the provisions were taken directly from legislation that passed the committee last year but did not reach a vote in the full Senate.

A key provision aims to reduce contract bundling, in which several contracts are consolidated into one offering, by improving reporting and oversight. Lawmakers and small business advocates have argued that bundling creates a disadvantage for small businesses in competing for awards.

Like the House bill (H.R. 3867), the Senate legislation would mandate the implementation of existing programs and augment them, not create new ones. Small business contracting goals are already well defined and promoted through several programs, but agencies are by and large failing to meet them.

"Currently, small businesses are eligible for $340 billion in federal contracting dollars, yet they receive only $77 billion," Snowe said in a statement.

The Senate bill mandates that the Small Business Administration implement the women's procurement program within 90 days. The program, created by Congress seven years ago to help agencies award 5 percent of contracting dollars to women-owned small businesses, still has not been fully implemented and has been the subject of renewed scrutiny recently. In announcing passage of the House legislation, Rep. Nydia Velazquez, D-N.Y., said the women's program has "languished in the current administration's endless delays" and urged immediate implementation.

In early October, lawmakers and the Women's Chamber of Commerce criticized SBA for initiating a new round of rulemaking for the program. The SBA defended that decision in a U.S. District Court of the District of Columbia status hearing Wednesday, arguing that further interagency review was necessary to ensure all aspects were legal and could be practically implemented. The Women's Chamber, however, maintains that the latest regulatory step was an unnecessary delaying tactic. The court ruled against the SBA in a 2005 case brought by the Women's Chamber, calling the program delay "unreasonable" and ordering the agency to develop and meet deadlines for implementation.

Judge Reggie B. Walton said he was "not happy with the pace of how the program has proceeded" and scheduled a follow-up hearing in late January. Walton said he hoped by that time the Office of Management and Budget will have finished the review process and the SBA could report on implementation.

Small business advocates, including the American Small Business League, lauded the recent legislation.

"I am pleased to see that S. 2300 includes all of the changes that have been recommended by the ASBL since 2002," ASBL President Lloyd Chapman said in a statement. "Every small business in the country needs to realize that they owe Senators Kerry and Snowe a debt of gratitude for drafting this legislation."

The ASBL has launched a national campaign in support of the Senate bill, asking its members and all small business owners to encourage their representatives to vote in favor of the legislation.

Kerry spokeswoman Kathryn Seck said it is unclear when the legislation will be considered. "Sen. Kerry is working with members who still have concerns about the bill and will address them before bringing the bill up for full Senate consideration," she said. She said a vote is extremely unlikely before Thanksgiving recess but that Kerry is hopeful the legislation will be considered before the end of the year.