Washington Report

Updates from the Capitol

Contracting Programs Face Setback in Legislation

The small business community suffered a blow on Friday when an amendment in the FY 2010 Department of Defense Authorization Act that would place the HUBZone, 8(a), and service-disabled veterans government contracting programs on an equal playing field was removed during conference negotiations.

Senators Mary Landrieu (La.) and Olympia Snowe (Maine), who serve as the Senate small business committee’s chair and ranking member, respectively, issued a joint release expressing their disappointment.

“In addition to the fact that [small businesses] should be given the opportunity to compete equally, placing one program over another has created confusion and disarray among contracting officers and small business owners alike, which essentially hinders [the businesses’] potential success,” said Landrieu.

The two lawmakers introduced the amendment in response to two Government Accountability Office decisions that gave the HUBZone preference over the other programs on set-aside contracts. Both the Office of Management and Budget and the Department of Justice weighed in, agreeing that the GAO rule contradicts Small Business Administration regulations that call for parity among all three.

As a result of the conflict, agencies have been pulling back contracts and reneging on previous agreements. And because of fraud related to fake HUBZone companies, the SBA has had to be a lot more diligent in the certification process for that program to ensure that applicants meet the requirements. Agencies also have been awarding fewer contracts. The amendment was crafted in response to those concerns.

“It is truly unsettling that members of the House decided to strip this critical provision in conference,” said Snowe. She also said that she plans to explore other avenues through which she can successfully move the amendment forward.

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