WASHINGTON – United States Senators Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, and Benjamin L. Cardin, D-Md., yesterday introduced S. 3458, the Section 8(a) Improvements Act of 2010. The legislation seeks to improve access to federal contracts for socially and economically disadvantaged small businesses by making key improvements to the SBA’s Section 8(a) contracting programs. This legislation represents the third in a series of steps that the Committee is taking to address the disparities and inequalities that currently exist in the federal procurement process.

“The reality is that small businesses need all the help they can get when it comes to accessing Federal contracts,” said Senator Landrieu. “Despite the fact that the Federal Agencies have a statutory goal to spend 23 percent of their contract dollars on contracts to small firms, in recent years the government has fallen short. By increasing contracts to small businesses by just 1 percent, we can create more than 100,000 new jobs. Today, we need those jobs more than ever.”

“As a nation, we need to create jobs and the way to create jobs is to help small businesses,” said Senator Cardin. “Ensuring that small businesses have access to government contracts is one of the most effective ways to expand opportunities and create jobs. But many small firms have been locked out of competing for valuable federal contracts. Our legislation continues our efforts to level the playing field for small businesses so they can more fully participate in our economic recovery.”

According to the Federal Procurement Data System, the Federal Government missed its 23 percent goal by .992 percent in fiscal year 2007 and 1.51 percent in fiscal year 2008. That represents more than $3.74 billion and 93,500 for 2007 and more than $6.51 billion and 162,700 jobs in 2008 lost for small businesses.

The Section 8(a) Improvements Act of 2010 aims to help socially and economically disadvantaged firms in several ways. The Act will:

  • Adjust the average annual income and net worth thresholds currently in place, to account for increases in inflation;
  • Require the SBA to establish maximum net worth thresholds for socially and economically disadvantaged small businesses working specific industries, includingthe manufacturing, construction, professional services, and the general services industries;
  • Extend the amount of time under which a small business can participate in the 8(a) program by establishing a transition period to provide newly graduated small businesses with continued assistance as they transition their business operations;
  • Improve contracting opportunities for small businesses through the creation of a Surety Bond Pilot Program which will guarantee 90 percent of surety bonds through the SBA;
  • Provide additional educational training and technical assistance on a wide range of topics, helping small businesses participating in the 8(a) program to be in a stronger position to succeed upon graduation program.

The text of the bill can be viewed by clicking here.