Despite increases in federal spending over the past decade, entrepreneurs told a Congressional panel today that, many small businesses continue to struggle to win their fair share of federal contracts.
With spending reaching $528 billion in fiscal year 2009, the federal government is one of the world’s largest consumers of good and services. And although the law sets specific small business contracting goals for agencies and empowers the Small Business Administration (SBA) to assist small firms, last year, federal agencies missed their small business contracting goals by $10 million.
“When large corporations win federal contracts, their existing workforces take on the project, but, when small firms get the work, they hire people,” Rep. Nydia M. Velazquez (D-NY), the Chairwoman of the House Committee on Small Business, said. “If that $10 billion went to small firms, they could use those funds to expand their operations and bring on new employees.”
Witnesses at today’s hearing described a procurement system full of complex obstacles that often block small businesses from winning their fair share of contracts. They identified practices like smaller contracts being “bundled” together, so that only large corporations can compete for them.
“For small firms trying to navigate this process, it would be hard not to conclude that the procurement system is broken,” Velazquez noted. “It is time to ensure federal agencies start living up to their small business contracting obligations and allow entrepreneurs to win their share of federal work.”
The House Committee on Small Business has been aggressively pushing for greater SBA oversight of small business contracting programs, especially in the wake of investigations revealing widespread fraud in the HUBZone and Service-Disabled Veteran-Owned Small Business programs. The Committee was the first to identify the problem of large companies gaming the system to win contracts meant for small firms.
