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Chair Snowe, Ranking Member Kerry, distinguished people in the Committee, many thanks for welcoming me personally to testify today about our tasks and issues about the prize of federal federal federal federal government agreements to businesses that are small.

The tiny Business Act establishes an objective of awarding smaller businesses for around 23 % of this total worth of prime agreements given government-wide each financial 12 months. The Act further recognizes the small company Administration’s (SBA) advocacy part for small enterprises, and directs the SBA, in essence, to simply simply just take all steps that are reasonable market possibilities for small enterprises, including companies owned by minorities, ladies, solution disabled veterans, as well as other disadvantaged individuals, to have federal federal federal government agreements.

We issue a report on the major Management Challenges facing SBA as you know, each year. Among the challenges relates to flaws when you look at the procurement procedure that have actually permitted big businesses to get and perform business honors and agencies to get small company credit for agreements done by big companies.

Contracting Officer Error.

Our efforts to create to prosecution situations of business contracting fraudulence have now been complicated because of the 3rd problem that i do want to give attention to – contracting officer mistake. Good situations have now been undermined by contracting personnel at Federal agencies that do maybe maybe not comply, or are simply new to small company contracting needs. We now have seen mistakes where agencies accepted bids from contractors on business agreements, although the contractors hadn’t certified they had been businesses that are small. Other mistakes have actually included neglecting to demand size certifications from companies, abuse of small company set-asides to procure these products of big companies (such as for example computers), counting on databases containing inaccurate details about small enterprises, abuse of this North United states Industrial Classification categories utilized to determine smaller businesses, and failing woefully to investigate discrepancies that declare that the specialist might not fulfill business requirements. The reality is that juries are reluctant to return guilty verdicts in a government contracting fraud case if the Government has been negligent, or has failed to look into obvious discrepancies although we will continue to diligently investigate cases of contractor fraud.

Wrong Entries in FPDS-NG.

The fourth problem has to do with wrong entries in FPDS-NG – the database utilized to develop and report government-wide data to Congress on small company honors. Although we have actually anecdotal proof with this problem, we don’t know the degree for the issue. Within the last 36 months, we now have gotten different complaints about big https://paydayloanssolution.org/installment-loans-ny/ organizations being reported in FPDS-NG as receiving business that is small. This occurred because the large business acquired a small business, or the business had been a small business and grew large in some instances. One other reason that is common happened, nonetheless, had been because of input mistakes. That it was a small business as we followed up on these complaints, we found some awards where the procurement was processed using “free and open” procedures and the award recipient had not represented. Contracting workplaces have actually admitted that the business that is small were merely input errors. Because FPDS-NG may be the database for monitoring federal federal federal government honors to business that is small it’s important that the info is proper.

What you can do to fix the difficulties with small company contracting?

To its credit, SBA has had some actions of this type. SBA issued a proposed legislation in 2003 to need contractors doing on multiple award agreements to annually recertify their business size. The OIG believes that the honor recertification would provide a control that is significant the precision and integrity of small company contracting. In 2004, SBA issued last laws requiring that agencies get a recertification as to size as soon as the agreement comes to a different company. Nevertheless, it offers now been a lot more than three years since SBA issued its proposed rule on yearly official official certification. This guideline has to be finalized. Instead, Congress could amend part 15(g) associated with the small company Act to need yearly official certification. Another good action to reduce contracting officer mistake should be to increase training on small company procurement for contracting personnel. While keeping that training may be the obligation of each procuring agency, SBA reported so it has helped develop training modules and does provide training to many other agencies. Even when supplying small company procurement training to contracting workers is certainly not a direct SBA obligation, we think that once the advocate of business, SBA has to offer whatever help it may of this type. SBA in addition has submitted proposed legislation suggested by the OIG to revise area 16(d) regarding the small company Act, making clear that SBA has got the authority to debar a specialist for size misrepresentation. In a current situation, the Agency had been reluctant to continue with debarment whether it had the necessary authority under section 16(d) because it was uncertain. Consequently, this matter ended up being introduced to a different agency for consideration. SBA officials recommend it is really not simple for them to debar contractors whom make size misrepresentations. That it may be administratively easier in some cases for other agencies to process such debarments, other agencies have little incentive to pursue the matter while we agree. We think that, because of SBA’s role that is unique the agency mainly in charge of the set-aside programs, it will share within the obligation for policing these programs. We urge Congress to enact the legislation we now have recommended to really make it clear that SBA can undertake a debarment for size misrepresentation.

Congress may also establish control procedures within SBA. As an example, some SBA officials took the positioning that, considering that the contracting agencies verify to GSA that the information and knowledge input into FPDS-NG is accurate, precision is definitely a control that is internal for every single procuring agency – not SBA. Nonetheless, legislation could produce a working workplace within SBA observe agreement integrity. That workplace might be in charge of determining whether procuring agencies are complying with small company contracting needs and whether or not the agencies are accurately reporting to their negotiated small company contracting objectives. Legislation may also need the top of the procuring agency to certify as to your precision for the reported information, and also to conduct an evaluation, through statistically legitimate sampling strategies or perhaps, to confirm that reported information properly reflects business contracting activity that is small.


To ensure all possibilities are pursued to simply help tiny and disadvantaged businesses obtain government agreements, we are going to continue steadily to challenge SBA to boost government-wide compliance with the objectives of small company contracting; to aggressively pursue prosecutions and debarments where warranted; also to look for imaginative and effective approaches to boost the cap cap cap ability of smaller businesses to accomplish company utilizing the U.S. national.

Many thanks for the chance to comment. We look ahead to responding to any concerns that you will find.



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