House Passes Senate Bill to Modernize Processes to Increase Small Business Participation in Federal Contracting

The House recently passed Senate Bill 583, titled the “Promoting Rigorous and Innovative Cost Efficiencies for Federal Procurement and Acquisitions (PRICE) Act.” The Price Act would require the Department of Homeland Security (DHS) to report projects from its Procurement Innovation Lab (PIL) that have used innovative techniques to help modernize contracting procedures. The bill would also require the DHS to offer training to its personnel on how to use these techniques. In addition, the PRICE Act would require that these innovative best practices be made available to other federal agencies to improve procurement methods and training. The Price Act also supports the White House’s goals of providing new federal contracting opportunities to small disadvantaged businesses.

A little background is helpful to understand the PRICE Act, and Congress nicely included some background in drafting the law. The act references the Business Opportunity Development Act of 1988, which established goals for federal contract awards to Veteran-owned Small Businesses (VOSBs), Service-Disabled Veteran-Owned Small Businesses (SDVOSBs), Women-Owned Small Businesses (WOSBs), Historically Underutilized Business Zones (HUBZones), and disadvantaged small businesses. Nevertheless, some agencies have been reluctant to utilize these contracting programs. The Price Act would provide a vehicle across agencies to identify and adopt best practices, procedures and strategies to improve procurement methods to increase small business participation in government contracting.

Another impediment to the federal government achieving its procurement goals is that the current data systems in the federal procurement process are cumbersome and not user friendly for many small businesses; especially for those who are new to the system.  A goal of the PRICE Act is to resolve these issues by requiring the Office of Management and Budget (OMB) to work with federal acquisition administrators to share innovative new contracting systems and procedures to modernize the application process.

The PRICE Act seeks to address obstacles that small businesses face when trying to take advantage of federal contracting opportunities. Especially those small businesses owned by women, minorities and veterans.

Senate Bill 583 specifically references the DHS as a leader in meeting small business contracting routinely earning the highest grade on SBA’s Annual Small Business Procurement Scorecard. SBA’s scorecard measures federal agencies’ success in meeting their overall small business contracting goals. DHS is the largest federal agency to achieve this record since the SBA began using the letter grade scorecard format in 2009.

DHS attributes its success, in part, to its active internal collaboration. This collaboration is demonstrated in its Procurement Innovation Lab (PIL).  The PIL is a DHS framework aimed at experimenting with innovative techniques for DHS acquisitions, evaluating those techniques and sharing the results and lessons learned. The PIL provides a safe space to test new ideas in the acquisition process, share lessons learned, and promote best practices.

The Price Act aims to use the success from the DHS and its PIL to adopt modernized business practices across all federal agencies.  The bill requires DHS to publish on its website an annual report of PIL projects that have successfully used innovative techniques.  

Senate Bill 583 also requires the Chief Acquisition Officers Council (CAOC) to convene to examine best practices from the PIL. The CAOAC will subsequently issue a report on the OMB website with the goal of promoting rapid adoption of the best practices determined by the CAOCs examination. In addition, the CAOC will encourage the head of each Federal agency to maintain a website dedicated to acquisition and innovation.  The report mentions the following as things that should be reported:

(A) innovative acquisition practices and applications of technologies that have worked well in achieving better procurement outcomes, including increased efficiency, improved program outcomes, better customer experience, and meeting or exceeding the goals under section 15(g) of the Small Business Act (15 U.S.C. 644(g)), and the reasons why those practices have succeeded;

(B) steps to identify and adopt transformational commercial business practices, modernized data analytics, and advanced technologies that allow decision making to occur in a more friction-free buying environment and improve customer experience; and

(C) any recommendations for statutory changes to accelerate the adoption of innovative acquisition practices.

The Congressional Budget Office (CBO) in its cost estimate expressed that Senate Bill 583 would probably change some methods and activities in contracting processes across most federal agencies.  CBO also expects that the bill would codify many of the methods and activities which would help to lock in best practices and provide consistent processes across agencies.

The legislation is supported by a broad coalition of groups including Small Business Majority, Association of Procurement Technical Assistance Centers (APTAC), GovEvolve, HUBZone Contractors National Council, and the Women Veterans Business Coalition.

Senate Bill 583 was submitted to the President for signing on February 14th. We’ll keep you updated on this and other matters related to small business federal contracting.

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