Contracting

Contracting

Access to federal contracts often means the difference between surviving and thriving for our nation's small businesses. One of the principle oversight responsibilities of the Committee on Small Business and Entrepreneurship is to ensure that all small businesses have the opportunity to sell their goods and services to the federal government - this includes making sure women, minorities, veterans and other underserved groups have equal access to contracts.

The American government spent more than $378 billion on goods and services during Fiscal Year 2007, making the government the largest single purchaser in the world. But small businesses face significant challenges in competing for these contracts, including a maze of complicated regulations, contract bundling, size standards with loopholes for big businesses and a lack of protections for sub-contractors. Despite the fact that federal agencies' are mandated to spend 23 percent of their contract dollars on contracts to small firms - 5 percent of which is required to go to women and disadvantaged firms and 3 percent to service-disabled veteran firms and HUBZones - the agencies often fall short of these requirements.

The American Recovery and Reinvestment Act helped bolster funding for the surety bond program to increase the number of small businesses competing for Federal contracts. But in the four months after the Act was passed, just over 10 percent of the $787 billion invested in contracts went to small businesses. As more of that $787 billion is spent over time, the Committee is working to ensure that the agencies remain true to their 23 percent goal.

Ensuring that small firms receive these contracts is important because putting government contracts into the hands of small businesses is not only good for entrepreneurs, but for all Americans. Small firms provide a strong, stable and diverse supplier base, allowing the government to get the best bang for its buck and assuring that taxpayer dollars are spent wisely.