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