The small-business conundrum

Recent news reveals that federal agencies overstated their success last year in contracting with small businesses that face socioeconomic disadvantages. It turns out that the Small Business Administration’s inspector general identified over $400 million of contract actions awarded to ineligible firms, thus overstating SB goaling performance in FY13.

Download the IG report here.

While reasons for misreporting are one issue, the perennial issue of meeting SB goals persists. Some people joke that when an agency fails to meet their SB target, the response is to increase it. Does goal setting work? Everyone agrees with fundamental ideals of small entrepreneurs and businesses bringing fresh ideas, outlooks, and solutions to government and societal problems.

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Pentagon’s sole-source contracts continue to dwindle, says GAO

The Defense Department is doing its part to curb the number of sole-source contracts awarded without competition and is properly justifying—in most instances—their use to help develop small, disadvantaged businesses, an audit found.

The Government Accountability Office’s Sept. 9 report to the House and Senate Armed Services committees evaluated sole-source contracts worth more than $20 million under the Small Business Administration’s 8(a) program and found that the Pentagon in fiscal 2013 continued a “significant decrease” in such contracts. It awarded five in 2013, each worth $20 million, compared with 27 contracts valued at $2 billion in 2009.

All five of the recent contracts were justified as being “in the best interest of the government,” though three of them failed to fully meet Federal Acquisition Regulation requirements that relevant officials sign off on them in a timely manner.

Fifty-five sole-source contracts were awarded under the 8(a) program over the past four years, the report found, led by the Army with 37, the Navy with 13, the Air Force with two, and three elsewhere in the department.

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Denied bid protests don’t guarantee smooth sailing for GSA’s office supply contract

The Government Accountability Office (GAO) recently denied bid protests for the Office Supplies 3 (OS3) strategic sourcing contract, but that doesn’t mean its clearing sailing for the General Services Administration (GSA).

The GAO found the GSA met requirements to evaluate the economic impact the strategic sourcing contract has on small businesses, even though the Small Business Administration recently said GSA failed to do so.

“GSA conducted market research and considered alternatives to the procurement approach set forth in the solicitation,” the June 9 decision says.

The GSA says that means OS3 will move forward.

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Differing DoD and SBA rules on protecting SBIR technical data causing confusion

The intellectual property rights of small business are subject to risk from differing Defense Department and Small Business Administration rules governing Small Business Innovation Research contracts, say DoD auditors.

Policies governing how long the technical data developed by small businesses under the SBIR program differ between the Small Business Administration SBIR Policy Directive and the Defense Federal Acquisition Regulation Supplement.

Federal agencies that spend more than $100 million annually on external research must allocate during the current fiscal year at least 2.8 percent of that budget to SBIR contracts.

The SBA directive governing SBIR says the technical data protection period starts when the last deliverable under the contract is delivered by a small business awardee. That period can be extended if the SBIR data is protected and referenced under a subsequent SBIR contract, even if the rights expired.

The DFARS rule says project completion determines the protection period. DFARS doesn’t whether the protection period can be extended or renewed.

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The DoD Inspector General’s report can be downloaded at:


Government on pace to meet small-business contracting goal — but will the bar get higher?

It appears the federal government has fulfilled its annual contracting promise to small businesses for the first time in seven years — and perhaps just in the nick of time, as lawmakers are looking to raise the bar going forward.

Government data available online currently show that federal agencies spent $83.2 billion at small companies last fiscal year, representing slightly more than 23 percent of the $355 billion in prime federal contracts officials consider viable for small firms. If so, it will mark the first time since 2006 that the government has met its statutory goal of spending at least 23 percent of all federal contracting dollars at small businesses.

More than a quarter of the contracts were awarded by the Defense Department, while the SBA, Federal Communications Commission and Interior Department each spent most of their contracting dollars at small businesses, according to the federal government’s online small business dashboard, which tracks government spending by agency.

SBA officials, who compile the data, declined to comment on the current numbers, saying they could change and the agency will issue an official tally later this year.

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Also see: Small business contracting numbers inflated by errors and exclusions, data show –