WIPP Procurement Briefing Summary: Small Business Provisions in the 2013 NDAA February 13 th, 2013 House Committee on Small Business
Background While a few of these provisions originated in the Senate or as House Amendments; the majority of these provisions are the result of the dozen hearings by the Small Business Committee (SBC) and the House Armed Services Committee s (HASC s) Panel on Business Challenges in the Defense Industry hearings and roundtables. The SBC hearings generated 11 contracting reform bills (8 majority/3 minority) which passed the SBC under Chairman Graves in March 2012. HASC s Chairman McKeon included the 8 Republican bills in the National Defense Authorization Act (NDAA) for Fiscal Year 2013. The NDAA passed the House on May 2012, and final bill was signed into law on January 2, 2013, as P.L. 112-239.
Small Business Contracting Reform in the NDAA There are approximately 30 provisions in Title 16 of the NDAA in Subtitles B and C that directly target small business contracting reform. These provisions aim to strengthen small business contracting opportunities, improve oversight, reduce fraud, and promote the health of the industrial base.
Section by Section Provision (Topic) House Bill / 1611 (OSDBU Participation) n/a Requires the Secretary of Defense to issue guidance to ensure that OSDBUs participant as early as possible in the procurement process. 1612 (DoD Audits) n/a Creates a small business advocate at Defense audit agencies. 1613 Requires an independent assessment of procurement performance of the Department of Defense (DOD) related to small business concerns. 1615 Restoration of 1 percent funding for administration expenses of Commercialization Readiness Program of DOD.
Provision (Topic) House Bill / Section by Section 1621-1623 (Procurement Center Representatives) H.R. 3980 Herrera Beutler Requires that small business advocates be part of federal procurement and acquisition planning processes. Requires that acquisition plans address how small businesses will be utilized. Increases the training for Business Opportunity Specialists and individuals with Federal Acquisition Certifications in Contracting. 1631-1633 (Goals) 1641 (Mentor Protégé Programs) H.R. 3850 Graves H.R. 3985 Schilling Does not raise the goals, but does require that Small Business Administration s (SBA s) Office of Advocacy study whether the goals should be raised. Expands the goaling base to help provide a more accurate representation of Agencies ability to meet their small business goals. Meeting the goals becomes a factor of bonus awards for executives. Requires that the SBA provide unifying regulatory guidance for civilian agency mentor-protégé programs. Creates a government-wide small business mentor-protégé program.
Section by Section Provision (Topic) House Bill / 1651-1655 (Transparency in Subcontracting) 1661 (Size Standards) 1671 (Bundling) H.R. 3893 Mulvaney H.R. 3987 Walsh H.R. 4081 Graves Makes it easier for small businesses to team. Changes the basis on which the limitations on subcontracting by small business concerns are calculated from cost to price. Makes it harder for businesses to fraudulently pass through contracts meant for a small business to a large business. Improves transparency and enforcement of subcontracting opportunities for small businesses. Requires OMB and agencies to publish insourcing guidance. Requires that SBA use the appropriate size standards, rather than counting large businesses as small and small businesses as large through the use of group size standards, which combine multiple industries into one size standard. Applies lower thresholds to reviews. Increases oversight on contract bundling and requires a report by GAO on consolidated and bundled contracts. Improves the treatment of construction contracts under consolidation at 2 or more discrete sites qualifies.
Section by Section Provision (Topic) House Bill / 1681-1683 (Increased Penalties for Fraud) 1691-1692 (OSDBU) H.R. 4206 Coffman H.R. 3851 Graves Creates good faith safe harbor through Procurement Technical Assistance Centers and Small Business Development Centers. Strengthens suspension and debarment rules. Modernizes of Offices of Small and Disadvantaged Business Utilization (OSDBU). Improves OSDBU s ability to advocate for small business contracts, focus on acquisition assistance, and fight insourcing and unjustified contract bundling.
Section by Section Provision (Topic) House Bill / 1695 (Surety Bonds) n/a Increases size of bonds the SBA can guarantee at no cost to taxpayer. Makes it easier for sureties to collection on the guarantee. 1696 Conforming Amends, Repeal of Redundant provisions; regulations. 1697 (WOSB) (Snowe Amdt) Removes the dollar caps on set aside contracts for the women-owned small business contracting program. 1698 (HUBZone) (Sherrod Brown Amdt) Allows certain base closure areas to participate in the HUBZone program. 1699 (Veterans) (Snowe Amdt) Terminates the National Veterans Business Development Corporation. 1699a (STEP Export Grants) (Akaka Amdt) Allows the Northern Mariana Islands to participate in an export grant program.
Moving Forward Importantly several of these changes require regulations to be fully implemented. In the coming months you should all watch as these regulations come out and be sure to comment on proposed regulations to ensure the regulations are meeting the needs of small firms.