Acquisition Streamlining Hurting Small Businesses: Hill Panel

  • Best in class contracts hamper ability to win government work
  • Agency officials lack training to implement new system

Small business contractors have been hurt by the federal acquisition streamlining effort that witnesses told a congressional panel has been too quickly implemented without sufficient training of agency contracting officers.

Category management and the best in class contracting vehicle designations that new system has created came under sustained attack at the House Small Business Committee hearing June 13 from industry witnesses and the panels chairman Rep. Steve Chabot (R-Ohio).

The Obama-era category management program was designed to speed and simplify the federal contracting process, allowing for greater participation. But smaller-sized existing and would-be government contractors say the new system has made it more difficult to win work.

There is great concern among the small business community that recent efforts steering spending towards best-in-class contracting vehicles will restrict competition and significantly reduce opportunities for the majority of small businesses, said Chabot. Current category management efforts seem to benefit the few, to the detriment of many.

Best in Class Contracts

Category management was designed to reduce redundant contract designations for common services and products. The 10 categories that comprise the initiative include information technology, office management, facilities and construction, and professional services, among others.

The program was on track to save the government $3.5 billion by the end of 2017, according to a 2016 blog post by former Office of Federal Procurement Policy administrator Anne Rung.

But the fate of the program has been unclear since President Donald Trump took office especially given that he still has yet to appoint a replacement for Rung.

Under the category management program, the Office of Management and Budget designated 32 contracts with best in class awards as of April 23, according to testimony from Alan Chvotkin, executive vice president and counsel for the Professional Services Council, a contractor trade group.

Best in class acquisition designations, according to a General Services Administration definition, identify government-wide contracts that satisfy key criteria defined by OMB, including providing transparency and leveraging the governments collective buying power.

Now, Chvotkin noted, a half-dozen best in class contracts have become the exclusive method by which agencies must purchase covered goods and services.

He expressed concerns that with the focus of category management being on reducing prices, the government may begin to purchase complex cybersecurity services in the same manner as common office supplies, which will limit value and reduce innovation.

Rushed So Quickly

For smaller businesses, this has had a serious impact at the ground level, said witness Beth Laurie Strum on behalf of the U.S. Womens Chamber of Commerce.

She noted that 25,000 small businesses provide IT services to the federal government, for example but only about 200 have the IT vehicles currently deemed Best-in-Class. Locking out ninety-nine percent of small businesses from prime contractor competitive opportunities will have a devastating effect on the small business industrial base, she said.

This new process has been rushed so quickly into the acquisition system without requisite clarity, regulations, or training that contracting officers have not received the information or training they need, said Strum.

Also testifying at the hearing were M.L. Mackey, the legislative affairs and policy committee chair for the small business division of the National Defense Industrial Association, and Shirley Bailey on behalf of the HUBZone Contractors National Council.

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