Bush Administration Shortchanges Small Business: Contracts Go Unchallenged

Legislation from John Kerry would prevent practice that favors big businesses over small businesses.

WASHINGTON — A recent report by the Small Business Administration’s Inspector General sheds light on the Bush administration’s failure to prevent federal agencies from putting contracts out of the reach of small businesses through a tactic known as contract bundling.

“This is just the latest example of the Bush administration shortchanging small businesses,” Kerry said. “The administration is quick to make claims about supporting small contractors, but time and again their big business policies leave small businesses behind. Bottom line, the Administration would rather do business with large companies than keep faith with America’s small businesses.”

According to the report: “SBA was not reviewing the majority of procurements reported by agencies as bundled. Eighty-seven percent of the reported potential bundlings (with a value of at least $384 million) we identified during the survey were not reviewed by SBA. SBA also did not fully comply with bundling regulations, an agreed upon OMB recommendation, and its own requirements.”

The Inspector General’s report also concluded that one of the significant reasons for the Administration’s ineffectiveness is its lack of adequate resources. In particular, the report pointed to the limited number of procurement center representatives, also known as PCRs, who monitor the federal procurement process. With only 43 PCRs to monitor contracting at over 2,000 procurement centers government-wide, the Administration only monitors 11.6 percent of centers and 60 percent of federal contracting dollars. This means that some $90 billion each year is not examined for contract bundling.

The report goes on to state that SBA’s Office of Government Contracting “was not in compliance with various requirements concerning contract bundling,” including, the requirement for a bundling database; the requirement of a best practices guide for agencies; and the requirement for a formal operating plan for its PCRs.

In response to the report, Kerry sent a letter to the SBA to further investigate the Administration’s deficiencies and to urge the agency to “provide the small business advocates, particularly PCRs, the resources they need to perform their oversight duties.”

In January, Kerry introduced the Small Business Federal Contractor Safeguard Act, S.137, to expand protections for small business contractors, curb contract bundling, and assist the SBA in its oversight duties. To read Kerry’s letter to Administrator Barreto, click here.

A copy of the SBA Inspector General’s report is available at http://www.sba.gov/ig/audits.html

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