The government’s success
in meeting mandatory small business contracting goals two years running is due
largely to White House focus and new requirements that program managers in the
Senior Executive Service pay greater attention to the acquisition process, the
Obama administration’s small-business development chief said on Tuesday.
Many call set-asides for small business “not a handout but a hand-up, but I
say it’s a matter of survival for the federal government as a whole,” said John
Shoraka, associate administrator of government contracting and business
development at the Small Business Administration. He spoke to contractors
gathered for American Express OPEN’s all-day summit with agency acquisition
officials working with small businesses that are women- or minority owned or
Outlining the government’s efforts to institutionalize the success of
meeting the goal of steering 23 percent of contract dollars to small business,
Shoraka said, “I’ve told my staff I could write a book saying that America’s
secret weapon is small business procurement -- when small business is engaged,
the industrial base is preserved. It’s win-win, because companies hire
employees, which has impact on the economy.”
The industry veteran and political appointee said, “The government as a
whole is interested in casting a broader net to make sure small businesses can
play” in winning $80 billion or more of the $400 billion-plus annual purchase
of goods and services, the world’s largest.
The SBA itself, Shoraka said, contributes through its “three C’s and one D,”
meaning contracting, capital (through loan guarantees) and counseling (in
partnership with academe and women’s centers), followed by direct loans in
cases of disaster.
But he credited the White House for impressing upon program offices -- which
weren’t putting special emphasis on small business goals -- that achieving the
goals should be part of annual performance reviews and for requiring each
agency’s Office of Small and Disadvantaged Business Utilization to report
directly to deputy secretaries. “A real-time dashboard” of progress in
contracting set-asides for qualified small businesses “is generating a lot of
interest and elevating the OSDBU,” he said.
Shoraka said he also feels pressure from Capitol Hill to exceed goals and,
for example, to clarify how small businesses owned by disabled veterans can
work with the Veterans Affairs Department, which requires eligibility
certification, and the rest of the agencies, which do not.
The small business set-aside program in the past few years has implemented
several policy changes, including an end to caps on the size of contracts
women-owned businesses can bid on; allowing small businesses to count small
business subcontractors in their work percentage requirement; new third-party
certification requirements for businesses billing themselves as woman-owned;
and a new requirement that agencies such as the State Department be measured on
the percentage of their overseas work that goes to small business.
Shoraka has sought to streamline the “bureaucratic” application process for
some set-asides, reducing 57 elements on one form to 27.
He lauded the new mentor-protégé program in SBA’s 8A business development
program. “A small firm may need a larger partner or management expertise, so
they team up in a joint venture to go after larger projects,” Shoraka said of
the program scheduled to take effect at the end of 2015.
Asked whether such a program might be abused by large companies seeking to
poach some of the set-asides, he said, “SBA will do an annual review of this
program, with lots of oversight, to make sure dollars are flowing to the
intended recipients. If it’s a joint venture, we make sure they’re getting
their fair share and is not a front,” he said. Congress is pressuring him for
fast implementation, he said, but “we’re doing it methodically.”
Critics, such as the American
Small Business League, regularly accuse large companies, particularly
defense contractors, of horning in on small business turf. But Shoraka
told Government Executive he “challenges that methodology. Data can be
massaged a lot of different ways. If in a full and open contracting process,
say, Raytheon gets the award but is coded as a small business or a set-aside
for women or 8A,” that could be a clerical error, he said. Such mistakes “do
happen,” he said. But that doesn’t happen with actual set-asides because “the
second-ranked bidder would file a protest.
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