Last week, the House of Representatives approved the National Defense Authorization Act for FY 2013 with a host of small business contracting reforms attached to the measure. The reforms AGC supported and advocated for include:
- Federal Agency Contract Bundling Justification. This would require all federal agencies to provide justification for bundling contracts, including construction contracts. Currently, the definition of "bundled contract" specifically excludes construction contracts. Consequently, all federal government bundled contracts — except bundled construction contracts — require such justification.
- Safe Harbor for Small Business Categorization Misrepresentation. The bill includes a safe-harbor provision from small business misrepresentation claims. Small business contracting affiliation laws and regulations that define circumstances when a small business is not acting as a small business are complex and confusing. This complexity and confusion can lead even innocent small business contractors to inadvertently fall victim to misrepresentation claims with stiff penalties, both civil and criminal, as well as possible debarment.
Additionally included is a Department of Defense (DOD) contracting pilot program where contracts over $25 million could be restricted to mid-sized contractors. Mid-sized contractors who are independently owned and are not dominant in their field of operation could participate in the program if they meet at least one of the following qualifications: (1) the contractor has twice the number of employees the Small Business Administration (SBA) has assigned as a size standard to the North American Industrial Classification Standard (NAICS) code in which the contractor is operating; or (2) three times the average annual receipts the SBA has assigned as a size standard to the NAICS code in which the contractor is operating.
However, the reform package also includes provisions AGC continues to oppose, including raising the federal government-wide small business prime contracting goal from 23 to 25 percent. The federal government has failed to reach this mark for years. AGC has noted that Congress should reform the current system to all the government to meet the existing goals and truly benefit small business, rather than raising the goal to an even higher level. By enacting reforms that make contracting goals more consistent with what the small business market can provide and that more accurately account for small business participation at lower tiers, the small business program would work better for the firms it was intended to benefit.
Earlier this year,
AGC testified before the House Small Business Committee concerning this small business package. As a result of that testimony and the association's advocacy efforts, pro-construction industry reforms continue to work their way through the legislative process.
For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org.