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Senate close to approving bill that would aid small contractors

By Louis Llovio
Daily Record
November 8, 2007

A U.S. Senate committee has approved a bill that senators say would improve the process in which small businesses in Maryland are awarded federal government contracts.

If signed by the president, the bill would improve oversight of the contracting process for small businesses and expand opportunities for companies owned by minorities, women and the service-disabled, Sen. Ben Cardin, D-Md., said in a telephone interview with The Daily Record Thursday.

The bill, S 2300, was unanimously approved by the Committee on Small Business and Entrepreneurship Wednesday and will now go to the floor of the Senate for a vote, which is expected before Thanksgiving.

A similar bill has passed the U.S. House of Representatives.

The two chambers would then meet in a conference committee to reconcile differences in the legislation and create a bill that would then go to the president.

Cardin, who co-sponsored the bill with Massachusetts Democratic Sen. John Kerry and Sen. Olympia Snowe, R-Maine, said the legislation had wide bipartisan support and should pass fairly easily.

Problems with the procurement process are of particular interest in Maryland because of the large number of firms in the state that do business with the federal government. It will become even more relevant as the effects of BRAC — the military base realignment and closure process — become reality.

According to a 2005 federal government procurement report, Maryland is the fourth largest receiver of government contracts in the U.S. It trails California, Virginia and Texas and receives 6 percent of all federal government contracts, worth $20 billion.

More than half of that, $10.8 billion, comes from defense contracts.

The U.S. Department of Health and Human Services and the National Aeronautics and Space Administration also handed out more than $1 billion in government contracts to Maryland-based companies.

Cardin said the bill was written to address complaints from small business owners that government set-aside programs were not working.

The bill would create greater oversight and transparency in the procurement process and guarantee that federal agencies are meeting requirements set by the U.S. Small Business Administration, he said.

“Too many barriers exist for small, minority and women-owned businesses, and I want to ensure a level playing field in the federal contracting process,” Cardin said.

Leutrell Osborne agrees that the way contracts are handed out is broken, but he disagrees that legislation is needed to fix it.

Osborne, an Annapolis government contracting consultant and former chairman of the Federal Office of Small Disadvantaged Business Utilization Directors Interagency Council, said enforcing laws on the books would solve the problems.

“They are just reacting to pressure,” he said. “They are creating more laws for nothing and they want the SBA to do more with less.”

Federal law, he said, mandates that agencies give a percentage of their contracts to small businesses.

In August, the SBA issued a status report that rated agencies on a “stoplight scale.” It found that when it came to handing small-business contracts, DoD, NASA and DHS failed to meet the basic standards. All three received a red rating for how they do business, meaning they did not meet any of the SBA’s goals.

Gloria Berthold, president of TargetGov at Marketing Outsource Associates Inc., a Baltimore government procurement consultant, said that while she said she applauded the Senate’s efforts, the bill lacked teeth.

She said government agencies are too short-handed and underfunded to do the oversight required by the new law or the existing ones.

The shortage in procurement officers also makes it easier for short-handed agencies to “bundle” contracts and let the big companies handle subcontracting.

Bundling is where small contracts are included in larger ones that are picked up my prime contractors, like Northrop Grumman Co.

In theory, the smaller contracts would trickle down to small business that would do the work as subcontractors.

But that doesn’t happen, she said.

The SBA did not return calls Thursday.