Congress Expected to Reject Section 809 Panel Recommendation to Eliminate Small Business Set-Asides

As we wrote about, the Section 809 Panel had recommended that Congress eliminate most small business set-asides for DoD acquisitions. The Panel suggested replacing small business set-asides with a five percent small business price preference. It looks like Congress heard our concerns—and those voiced throughout industry—and will reject this suggestion.

As Steven Koprince wrote, the recommendation was questionable for a number of reasons. For one, it didn’t accurately describe the current state of small business set-asides by giving “the impression that big, bad FAR 19.502-2 is grim and unyielding, regularly forcing beleaguered DoD Contracting Officers into ill-advised set-asides.”

For another, the Panel stated that small business set-asides actually hurt small businesses, by forcing them to stay under the size limit. But this overlooked the fact that small businesses were able to grow larger because there were restricted procurements where small businesses did not have to compete with huge businesses.

A third reason was that a 5% price preference was unlikely to ensure small businesses received a fair share of government contracts. Based on the track record with the HUBZone price preference, it’s simply not enough to get contracting officers to award to small businesses.

Well, we have an update on this recommendation. Thanks to work of WIPP (Women Impacting Public Policy) and others, Congress and DOD have indicated they will reject the Panel’s recommendation to eliminate small business set-asides!

This decision came after several industry advocates and organizations (including Koprince Law) signed a letter urging both the House and Senate Armed Services Committees to reject this recommendation. We applaud the decision by Congress and DOD to reject this recommendation—not only was its rationale flawed, but its consequences likely would have been disastrous for small businesses.

While we questioned this recommendation and others from the Panel, there were other recommendations that made a lot of sense. We hope those recommendations are given fair consideration, and the never-ending process of streamlining the federal government’s acquisition process moves forward.

Check SmallGovCon for more updates on the Panel’s recommendations.