In late February 2014, the House proposed two bills which are designed to ensure that small business owners get a bigger chunk of government contracts, which, in an ideal world, will lead to growth and a stronger economy. But is it everything it’s supposed to be?
Bolstered by Chairman of the House Small Business Committee Sam Graves, the two legislative pieces are taking aim at government contracting, hopefully making them more feasible for small businesses and leading to an increase in government contracting as a whole. Named the Greater Opportunities for Small Business Act, it’s taking aim at the current contracting statistics and citing a goal of 25 percent (up from the current 23 percent goal).
When this Act is enforced, annual government spending for small businesses will go up by nearly $10 billion. On the other hand, Graves’ other piece, the Contracting Data and Bundling Accountability Act, will enforce more transparency when it comes to bundling contracts. In other words, when combining a number of small contracts (a common government practice), the process will be more accessible to the many small businesses which depend on these sources of funding. According to Barbara Kasoff, President and CEO of Women Impacting Public Policy, “Both of these bills together go a long way to create a more level playing field for small business owners.”
The Critics’ Stance
On the surface, this seems like a win-win scenario, but critics are wary. Some claim that this is a “better in theory” approach and there might be opportunities brushed under the rug. For example, one adviser for American Express OPEN, Lourdes Martin-Rosa, says the government has been talking about upping small business spending goals for “years.” Instead of shooting for 25 percent out of the gate, “I want to see them reach the 23 percent and then talk about 25 percent.”
If you’re a small business owner, does this seem too good to be true? It’s true that for at least the past seven years, the government has largely missed the mark, not even coming close to the 23 percent goal; this has hurt small business valuation, putting more financial pressure on small business owners. However, 2012 was a close year, with a record nearly $90 billion (22.3 percent) in small business spending for the year, but it’s possible that that close call spurned the government to shoot for the stars. Small businesses will have to wait until July 2014 to see if the goal was made for 2014.
A History Of Struggles
In addition to small business contracting goals, government agencies have also fallen short of their procurement for “set-aside programs.” An example is women-owned businesses, which haven’t succeeded in the goal set by the Small Business Administration (SBA) to earmark five percent of procurement dollars for contractors in this realm. Even so, Martin-Rosa sees the future as bright and has high hopes for the 2013 goal being reached.
As for 2014? She thinks it will be a hallmark year for small government contracts and businesses alike. Last year, contracts were slowed due to Capitol Hill brinkmanship issues, but the clogs should be cleared for 2014. Plus, lawmakers are coming around, as evidenced by the bipartisan spending bill, and will help bolster small contracts, too. Whether or not 2014 has what it takes is anyone’s guess, but Martin-Rosa thinks it will be a record-breaking year and sees the wheels being greased from all sides, which will ultimately lead to not more jobs, but more localized spending and efforts around the country.